Scaroni, ENI, Corrib.

sligo | crime and justice | press release

Wednesday October 25, 2006 22:42

by JFH

All about negotiation!

What is the sub text behind Ireland's OIL/gas giveaway?

Scaroni, Corrib.
Was it Ireland’s loss when Berlusconi and ENI, the Italian state owned oil company were gazumped by Shell when they hoped to take over Enterprise Oil (discoverers of the Corrib Field)? The British Establishment went apoplectic with thoughts that their patch could be trampled on by the Azzurri and persuaded Shell to submit a winning bid! You can see parallels with Dubs’ reaction to the Mayo Team taking over Hill 16 side of Croke Park. Mayo people have an innate reaction to those who throw weight around: be it small farmers from Erris or its football players: even with a possibility of coming out second best; a point has to be made. Neither Shell nor Dubs have or had a divine right to be there!

In another part of the world ENI offered 75% of revenue from any production to the Iranian Government, rather than the standard half. Note the word “half”. The Irish will get 25% of the net profit from the Corrib field i.e. after all costs are written off; Note: ENI offered 75% of the turnover i.e. before costs is taken into account. It boils down to the State getting a possible €5 rather than a €75 take from every €100 turnover from the Corrib Field. Norway also got 75% of revenue from some of their hydrocarbon fields. The government may get €5 from Shell etc; but will definitely extract at least €13.50 VAT on top of each €100 gas used by its own citizens!

Paolo Scaroni, the current Chief Executive of ENI, believes big oil companies ought to be more humble (now there’s a word that is not seen or heard very often in modern day Ireland). “But Mr. Scaroni takes this deference further than most. He is not at all offended, he says, by the notion that governments will increase taxes or tear up contracts to try to grab a bigger share of the proceeds of oil production when the price rises. The oil belongs to the countries concerned, he says, not to the oil firms that pump it, which must accept that they have no God-given right to the extra revenue. He does caution that governments should change existing arrangements by negotiation, not fiat. Indeed, he is in the middle of a row with the Venezuelan authorities about just that. But it is a far cry from oil bosses' usual rhetoric about the sanctity of contracts.”

“The oil giants are trying to do business as usual, he explains, as if nothing is wrong. Yet they are, in fact, having trouble laying their hands on their own basic product. State-owned or state-controlled national oil companies (NOCs) are sitting on as much as 90% of the world's oil and gas, and are restricting outsiders' access to it. Worse, the best NOCs are beginning to expand beyond their own frontiers and to compete with the oil majors for control over the remaining 10% of resources.” These quotes are taken from The Economist print edition Jul 20th 2006. http://www.economist.com/business/displaystory.cfm?stor...89081
Wow! Now which oil expert was recently asked to advice a political party gathering in Westport? Whoever it was it certainly was not Scaroni. Or maybe it was he; because there were nothing but faces of doom from that part of proceedings that was televised; or could this be because local Chief, Michael Ring, built in a similar mould to Scaroni, was nearby! Can some of our most powerful politicians be as gullible as they appear to be? Or who is ruling the roost? See an attempt to answer this conundrum at http://www.indymedia.ie/article/78032?author_name=JFH&c...64597

The bottom line is that the citizens of the Irish State and the EU are saddled with:

• A Shell consortium that appears to be focused on extracting our hydrocarbons with least cost as possible. A company who is prepared to gamble with Irish Citizens’ safety and is prepared to go to extremes to get their way. In such a scenario what hope is there of re negotiating a revised deal on sharing of the wealth generated? The revenue from the Corrib field will have increased by fivefold since it was first deemed exploitable.

• An Irish Government, Opposition and EU who are prepared to have its citizens pay top market price for its own fuel. Gazprom, the Russian State owned oil/gas Company charge $240 per 1000 sq meters of Gas to EU and around $42 to Belarus and their own people.

• An Irish Government with little Dail opposition that has severely weakened its bargaining power if ever it wishes to renegotiate agreements; as it appear to be still giving out licenses under similar terms.

One must have a little FAITH (or could this be construed as abdicating responsibility) that there are people, somewhere in authority with clout, know something the rest of us does not know, are in control with one eye on overall long term survival of all things Irish and what this entails; you know idealistic and knowledgeable peacetime leaders, like previous chiefs who had long term visions for us descendands.

Removed uneccessary editorial comment -Ed

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Comments (4 of 4)

Correction

Thu Oct 26, 2006 16:55

"Square" meters of gas should read "cubic" meters. See: http://news.bbc.co.uk/2/hi/business/4569846.stm

and incomplete

by shabby

Thu Oct 26, 2006 17:04

An Irish Government, Opposition and EU who are prepared to have its citizens pay top market price for its own fuel. Gazprom, the Russian State owned oil/gas Company charge $240 per 1000 sq meters of Gas to EU and around $42 to Belarus and their own people

What fuel are you on about? the fuel that comes from Russia>? The irish and Europeans have no fuel that is why russia supplies most of it, Russia has lots of fuel end of story

do you know how much the Irish govt has creamed off exploration licences?

didnt think so......

this is a shabby article i must say!!!

sorry but it is low on fact and high on vapours

Thanks for the review

Fri Oct 27, 2006 11:45

"An Irish Government, Opposition and EU who are prepared to have its citizens pay top market price for its own fuel" By this I mean the fact that we will have to pay "market price" (in reality, this is whatever Putin decides it to be, because the Shell consortium can hardly charge more) for gas from the Corrib Field when it eventually come on stream.

Thanks for reviewing the article, I am only too willing to clarify any other area that you are having difficulties with. This is a topic that our government has treated with little respect and importance; you are right to be critical if the syntax is not clear.

Review

by HJ

Sat Oct 28, 2006 14:12

I think the article is good but Shell do give a much higher % of revenues to the Govt elsewhere in the world so I would highlight the role of the Govt here - it's them that you really should hammer and ENI or anyone else would have given what was agreed under the license (which was a disgraceful 25%)

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Scaroni, ENI, Corrib.

Comments (4 of 4)