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That's gas - bills up 15% after Corrib field opens- SINDO


Shell to Sea

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Saturday's International Herald Tribune carried a reuters report on the interest of the energy companies to snap up licences to drill off the west coast of Ireland: http://www.iht.com/articles/2008/08/24/ ... ireoil.php

Quote: A study commissioned by the Irish government said early data showed potential reserves of 10 billion barrels of oil off Ireland's Atlantic coast.
...
Patrick Shannon, a professor of geology at University College Dublin, said while no oil discoveries had yet been made around the Atlantic margin, tests showed it might lack sulfur, making it easy to refine and more valuable.
"Everybody wants a Brent crude or a West Texas type crude, and the Irish crude oil - certainly in the Atlantic margin - is of that quality," Shannon said. "We know there is a petroleum system, we don't know its extent."


The article painted a somewhat incomplete picture of the generous tax and royalty regime in Ireland:

Quote: Exploration companies pay a 25 percent tax in Ireland, which rises to 40 percent for the most profitable finds - lower than the 50 percent rate in the United Kingdom, 78 percent in Norway and over 80 percent levied in other regions.

Perhaps the journalist was unaware that exploration and "development" costs can be written off against tax, and the higher charges (40%) don't apply to fields like Corrib which were licensed before 2007. The Royalty rate in Ireland is set at zero, which means that whatever you find in your licensed area belongs to you in its entirety, so all you have to pay is corporation tax on profits.

Can anyone from the political parties which support these generous terms explain why ordinary people who live in Ireland won't see any benefit? Yesterdays's Sunday Independent Newspaper carried a story showing that the price of gas will rise by 15 per cent after Corrib comes on stream.


That's gas -- bills up 15% after Corrib field opens

By MAEVE SHEEHAN
Sunday August 24 2008


ONCE gas production comes on stream from the Corrib Gas fields off Belmullet, Co Mayo, next year the price of gas to Irish users is set to shoot up by 15 per cent.

Consumers are already facing a 20 per cent increase in gas bills from September. However, an internal memo from the energy regulator warns that the price will soar even higher once production starts at the Corrib gas fields next winter.

article continues:www.iht.com/articles/2008/08/24/business/ireoil.php


You'd think with all the benefits going to the energy companies, and all the drawbacks going to ordinary consumers, then the least they could do is exploit the reserves safely, but you'd be wrong...
 


C&AG

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Shell to Sea said:
"development" costs can be written off against tax, and the higher charges (40%) don't apply to fields like Corrib which were licensed before 2007. The Royalty rate in Ireland is set at zero, which means that whatever you find in your licensed area belongs to you in its entirety, so all you have to pay is corporation tax on profits.
Are you suggesting that development costs can be creatively accounted for?

Can you link to the terms as written out in the original documents please? Are those terms in the Department of Comms and Energy or Finance?
 

Shell to Sea

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Dáil Éireann - Volume 537 - 12 June, 2001

Written Answers. - Corrib Gas Field.

Mr. Ring

149. Mr. Ring asked the Minister for the Marine and Natural Resources the monetary benefits which will accrue as a result of the Corrib Gas Field; and the benefit it will bring to the people of north Mayo. [16732/01]

Mr. Fahey

Minister for the Marine and Natural Resources (Mr. Fahey): The current fiscal terms for exploration and exploitation of petroleum offshore Ireland are governed by the provisions pertaining to petroleum contained in the Finance Act, 1992. Under this Act, corporation tax at a rate of 25% will apply to profits from gas production under the petroleum lease for the Corrib field. The corporation tax will be payable after the deduction of allowances. These allowances relate to capital and operating expenditure and abandonment costs for the field. In addition, exploration costs are also deductible, which need not necessarily be field related, provided they have been incurred in the 25 year period immediately prior to the commencement of field production. The corporation tax accruing will depend on a number of factors, including those referred to above, and the amount and price of the gas sold.


A journalist told some Shell to Sea activists in 2006 that Shell intended to count everything they could get away with, security, press and public relations, building costs in Dublin, telephone bills, and best of all the legal costs for taking the Rossport Five to court as "exploration costs (not necessarily be field related).

It may be that this is not true, but the company's record would hardly inspire confidence that Shell are not going to do their best to avoid paying tax where possible.
 

goosebump

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Shell to Sea said:
Quote: Exploration companies pay a 25 percent tax in Ireland, which rises to 40 percent for the most profitable finds - lower than the 50 percent rate in the United Kingdom, 78 percent in Norway and over 80 percent levied in other regions.
Simple Facts for Rent-An-Issue Hippies (Part 1):

Number of successfully drilled fields in Norway, UK and Ireland in last 30 years:

UK (North Sea & Irish Sea): 89
Norway (NCS): 26
Ireland (Atlantic): 1

http://en.wikipedia.org/wiki/List_of_oi ... _North_Sea
 

AAA

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goosebump said:
Shell to Sea said:
Quote: Exploration companies pay a 25 percent tax in Ireland, which rises to 40 percent for the most profitable finds - lower than the 50 percent rate in the United Kingdom, 78 percent in Norway and over 80 percent levied in other regions.
Simple Facts for Rent-An-Issue Hippies (Part 1):

Number of successfully drilled fields in Norway, UK and Ireland in last 30 years:

UK (North Sea & Irish Sea): 89
Norway (NCS): 26
Ireland (Atlantic): 1

http://en.wikipedia.org/wiki/List_of_oi ... _North_Sea
So how does that justify us handing over our natural resources for free to profiteers?
 

goosebump

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AAA said:
goosebump said:
Shell to Sea said:
Quote: Exploration companies pay a 25 percent tax in Ireland, which rises to 40 percent for the most profitable finds - lower than the 50 percent rate in the United Kingdom, 78 percent in Norway and over 80 percent levied in other regions.
Simple Facts for Rent-An-Issue Hippies (Part 1):

Number of successfully drilled fields in Norway, UK and Ireland in last 30 years:

UK (North Sea & Irish Sea): 89
Norway (NCS): 26
Ireland (Atlantic): 1

http://en.wikipedia.org/wiki/List_of_oi ... _North_Sea
So how does that justify us handing over our natural resources for free to profiteers?
All OGE in Northern Europe is carried out by private companies.

Certain countries reserve the right to take a public stake in individual fields when awarding licenses. When they do, they have to pay the costs associated with that stake from taxpayers founds.

In the early days of exploration in the UK and Norway, the State did not invest in exploration. This only began when it became clear that there were proven reserves and after a number of successful drills. The Governments of the time took the view that it would be irresponsible to spend tax payers money on highly-speculative OGE.

Only 1 successful drill has been completed in Irish waters in the last 30 years.

You and your pinkard friends are arguing that we should spend hundreds of millions of taypayers money on speculative OGE, when it is far from certain that any meaningful return will accrue.

More responsible and realistic people believe that we should allow the private sector to bear the initial risk and infrastructural costs, such that we can properly estimate the value of the reserves, wherein we can then begin to make more informed choices about whether or not the State should invest in OGE, as was the case in the UK and Norway.

Its not exactly rocket science.
 

GDPR

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Why should the state be in a hurry to drill and discover anything ? Whats wrong with waiting 10,20 or 50 years and letting the desperation for reserves of the oil and gas companies drive them to our shores? At which point anything which is found will have been probably the best investment the state ever made and possibly way better even than the national pensions reserve fund. Why is Ireland cursed with politicians and leaders who only think of the short term consequences of their actions and decisions? Lets' do our children and their children and the nation a favor.
 

wombat

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The reasoning behind the Indo article appears to be that once Corrib comes ashore, the 2nd interconnector will be redundant but will still have to be paid for by Bord Gais and they must pass the costs on to the consumer. I must admit I did not quite follow their reasoning, it sounds like another stealth tax to me.
 

AAA

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fionnmccool said:
Why should the state be in a hurry to drill and discover anything ? Whats wrong with waiting 10,20 or 50 years and letting the desperation for reserves of the oil and gas companies drive them to our shores? At which point anything which is found will have been probably the best investment the state ever made and possibly way better even than the national pensions reserve fund. Why is Ireland cursed with politicians and leaders who only think of the short term consequences of their actions and decisions? Lets' do our children and their children and the nation a favor.
Errrr because they only think about winning the next election and lining their own pockets. They don't look beyond that.
 

wombat

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fionnmccool said:
Why should the state be in a hurry to drill and discover anything ? Whats wrong with waiting 10,20 or 50 years and letting the desperation for reserves of the oil and gas companies drive them to our shores? At which point anything which is found will have been probably the best investment the state ever made and possibly way better even than the national pensions reserve fund. Why is Ireland cursed with politicians and leaders who only think of the short term consequences of their actions and decisions. Lets' do our children and their children and the nation a favor.
This is a valid argument, although its not one I agree with. The value of the Corrib find has increased due to the delays in bringing it ashore. Its likely that some of the finds which were too small or difficult to exploit will become viable but there is no evidence to support the wishful thinking that colours most of the posts.
There is a huge difference in the value of a gas find compared with an oil strike. If someone strikes oil, the interest in exploration licences will increase and terms can be renegotiated, until then, royalties & taxes will be as relevant to the govt. revenue as lotto tickets are to the rest of us.
 

goosebump

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AAA said:
fionnmccool said:
Why should the state be in a hurry to drill and discover anything ? Whats wrong with waiting 10,20 or 50 years and letting the desperation for reserves of the oil and gas companies drive them to our shores? At which point anything which is found will have been probably the best investment the state ever made and possibly way better even than the national pensions reserve fund. Why is Ireland cursed with politicians and leaders who only think of the short term consequences of their actions and decisions? Lets' do our children and their children and the nation a favor.
Errrr because they only think about winning the next election and lining their own pockets. They don't look beyond that.
Its actually because we elect them.
 

AAA

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goosebump said:
AAA said:
fionnmccool said:
Why should the state be in a hurry to drill and discover anything ? Whats wrong with waiting 10,20 or 50 years and letting the desperation for reserves of the oil and gas companies drive them to our shores? At which point anything which is found will have been probably the best investment the state ever made and possibly way better even than the national pensions reserve fund. Why is Ireland cursed with politicians and leaders who only think of the short term consequences of their actions and decisions? Lets' do our children and their children and the nation a favor.
Errrr because they only think about winning the next election and lining their own pockets. They don't look beyond that.
Its actually because we elect them.
It's actually not quite as simple as it may appear in your right wing linear mind. There's all sorts of reasons why people don't vote in their interests such as misinformation, propaganda, outright lies, the capitalist owned media and the huge financial dominance right wing crooks have as they accept political donations/bribes. In fact Ireland is barely a democracy. The majority voted no to lisbon yet they are just going to make us vote until we "get it right", the majority don't support co-location and privatisation of health yet the government plough on with it, the majority want more funding for public transport and education yet the government don't care. Electing a government every 5 years on the basis of lies is not democracy. Look at what FF said in the last election, promising more funding for health and more beds etc etc Only a year later they do a complete U-turn.
 

GDPR

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wombat said:
fionnmccool said:
Why should the state be in a hurry to drill and discover anything ? Whats wrong with waiting 10,20 or 50 years and letting the desperation for reserves of the oil and gas companies drive them to our shores? At which point anything which is found will have been probably the best investment the state ever made and possibly way better even than the national pensions reserve fund. Why is Ireland cursed with politicians and leaders who only think of the short term consequences of their actions and decisions. Lets' do our children and their children and the nation a favor.
This is a valid argument, although its not one I agree with. The value of the Corrib find has increased due to the delays in bringing it ashore. Its likely that some of the finds which were too small or difficult to exploit will become viable but there is no evidence to support the wishful thinking that colours most of the posts.
There is a huge difference in the value of a gas find compared with an oil strike. If someone strikes oil, the interest in exploration licences will increase and terms can be renegotiated, until then, royalties & taxes will be as relevant to the govt. revenue as lotto tickets are to the rest of us.

I dont get why you don't agree. The exploration companies will come when they run out elsewhere. Desperation will bring them here whether there is more Oil/Gas or not at which point anything found will have increased in value way above any other investment we could possibly make now. Plus increased investment and progress in technology will make oil and gas easier to find in future. This is a legacy we can leave our children and our childrens' children. Why hand it away for nothing to support the industry of other economies when its always there increasing in value for the time when the children of our nation will need it most ? Didnt' the USA until recently have a ban on oil drilling in it's coastal waters for many similar long sighted reasons ? Any find in the current situation will not give us any of the value a wait and see approach does. If we turn out to have a lot of Oil and gas then we have no need to subsidise anyones' drilling and if we have almost none then still why subsidise and what do we get out of it ? It makes no long term sense considering the nation and the economy should still be here 10,000 years from now (provided theres no armageddon etc) with exactly the same and probably an increased need for energy as before. In short anything thats' out there will be found eventually and our nation doesnt' need to subsidise it. We dont' even have to look ahead 10,000 years. 50 is enough given the present state of world affairs.
 

ajcahill

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goosebump said:
AAA said:
goosebump said:
Shell to Sea said:
Quote: Exploration companies pay a 25 percent tax in Ireland, which rises to 40 percent for the most profitable finds - lower than the 50 percent rate in the United Kingdom, 78 percent in Norway and over 80 percent levied in other regions.
Simple Facts for Rent-An-Issue Hippies (Part 1):

Number of successfully drilled fields in Norway, UK and Ireland in last 30 years:

UK (North Sea & Irish Sea): 89
Norway (NCS): 26
Ireland (Atlantic): 1

http://en.wikipedia.org/wiki/List_of_oi ... _North_Sea
So how does that justify us handing over our natural resources for free to profiteers?
All OGE in Northern Europe is carried out by private companies.

Certain countries reserve the right to take a public stake in individual fields when awarding licenses. When they do, they have to pay the costs associated with that stake from taxpayers founds.

In the early days of exploration in the UK and Norway, the State did not invest in exploration. This only began when it became clear that there were proven reserves and after a number of successful drills. The Governments of the time took the view that it would be irresponsible to spend tax payers money on highly-speculative OGE.

Only 1 successful drill has been completed in Irish waters in the last 30 years.

You and your pinkard friends are arguing that we should spend hundreds of millions of taypayers money on speculative OGE, when it is far from certain that any meaningful return will accrue.

More responsible and realistic people believe that we should allow the private sector to bear the initial risk and infrastructural costs, such that we can properly estimate the value of the reserves, wherein we can then begin to make more informed choices about whether or not the State should invest in OGE, as was the case in the UK and Norway.

Its not exactly rocket science.
"The waters west of Ireland contain several large sedimentary basins,
broadly similar geologically to basins of the Atlantic Margins of
Norway, UK and Canada. The principal basins that make up the
Atlantic Ireland area, the Porcupine, Rockall, Slyne, Erris and
Donegal basins, are under-explored with only 9 exploration wells
drilled in the last 10 years
. Yet, a number of proven and emerging
play types together with world class source rocks can now be
demonstrated. Recent assessments of yet-to-find resource potential
based on petroleum systems analysis indicate in excess of 10 billion
barrels of oil equivalent for these basins,
on a risked reserve basis.
With play-opening discoveries such as Corrib (gas) and Dooish
(gas/condensate), these basins show promising potential which
can be effectively and efficiently explored using modern technology
and evaluation methods. As such, Atlantic Ireland is one of the few
remaining regions in the North Atlantic offering opportunities to
explore and develop major hydrocarbon resources."

From paragraph 3 of the brochure for a conference run by the government in 2006 called "Exploring Atlantic Ireland" see http://www.pesgb.org.uk/pesgb/system/At ... reland.pdf
 

Cael

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Now thats what I call a Give-a-Way: Ten billion barrels? If this generation of Irish people are too defeated to claim this wealth for ourselves, then we should leave it alone and pass it on to our children, who will, hopefully, be better than us.
 

AAA

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Cael said:
Now thats what I call a Give-a-Way: Ten billion barrels? If this generation of Irish people are too defeated to claim this wealth for ourselves, then we should leave it alone and pass it on to our children, who will, hopefully, be better than us.
Well said. The passive attitude of Irish people to being consistently screwed over is quite appaling.
 

wombat

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fionnmccool said:
I dont get why you don't agree. The exploration companies will come when they run out elsewhere. Desperation will bring them here whether there is more Oil/Gas or not at which point anything found will have increased in value way above any other investment we could possibly make now.
I see our need for oil & gas as a relatively short term problem - 20 to 50 years. If oil or gas is found it should be brought ashore as soon as possible as I expect that future generations will not be as dependent on oil as we are. Its a choice which we don't have at present as we have no oil source available - hopefully this will change but the record is poor, despite what Mr O'Reilley says.
 

GusherING

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How about levying a windfall tax on the company thats selling all the gas? I find the whole 'Norway have way more gas fields than us and therefore can charge higher taxes' to be a red-herring. No one is saying the state should pay for gas exploration, but if a private company wants to do it, it should be on our terms. Isn't it ironic how the shell to sea campaign have increased the value of the gas by delaying the project though! :roll:
 

wombat

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GusherING said:
How about levying a windfall tax on the company thats selling all the gas?
Look at your gas bill - BGE's main function is as a mechanism for levying stealth taxes.
 

GusherING

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wombat said:
GusherING said:
How about levying a windfall tax on the company thats selling all the gas?
Look at your gas bill - BGE's main function is as a mechanism for levying stealth taxes.
Who are BGE? Excuse my ignorance. Do you mean Bord Gais? I have heard that the Energy Regulator sets prices artificially high so that the private sector can actually compete in the market they are trying to create. Perhaps that should be tackled also?
 

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