Dempsey gives away billions of euro more of Ireland's gas

Wednesday August 23, 2006 19:42

by William Hederman

Announcement made quietly at 6am Saturday

Billions more cubic metres of Ireland's natural gas has been given away to four international consortiums - including Shell and Statoil. The announcement was made about as quietly as it is possible for a government department to make an announcement.

Ireland's Minister for Natural Resources, Noel Dempsey has decided to offer several gas exploration licences covering 25,000 square kilometres in the Slyne, Erris and Donegal basins.

The announcement was made last Saturday, but has not been reported anywhere in the Irish media. This may be because Minister Dempsey's department made the announcement on its website at six o'clock on Saturday morning.

Despite promises to review the licensing system, Dempsey has granted these licences under the same extraordinary terms as those enjoyed by the Shell-led consortium which is attempting to build a high-pressure production pipeline through Rossport in Co Mayo.

Thanks to legislative changes made in the 1990s by Fianna Fail ministers, including Ray Burke and Bertie Ahern, companies (invariably multinationals) who are awarded these licences own all the gas they extract from under Irish waters. They pay no royalties; can sell the gas to the Irish people at full market rates and only pay tax on whatever profits they declare after writing of all production costs - even the costs of shutting down the well.

Minister Dempsey is quoted in the release as saying he is "particularly pleased with the level of interest shown in this licensing round. Indigenous oil and gas resources are crucial to Ireland’s security of supply." Strange then that the release was issued when the nation was asleep.

Veteran journalist and economist Colm Rapple spotted the announcement and spoke about it on RTE Radio's Five Seven Live today, Wednesday. (It was at the start of the programme if you're looking for the audio file).

Rapple commented that Saturday's announcement coincided with the release of CAO offers, which attracted much media attention. He also predicted that a typical project (e.g. Corrib) would be half way through its life before tax would be paid on the profits arising from it.

Here are the successful applicants:

1. Statoil Exploration (Ireland) Limited with Shell E. & P, Ireland Limited as a partner.
2. Serica Energy (UK) Ltd.
3. Island Oil & Gas plc with Lundin Exploration BV and Endeavour Energy (UK) Ltd. as partners.
4. Island Oil & Gas plc with Lundin Exploration BV as partner.

To read the press release:
http://www.dcmnr.gov.ie/Press+Releases/Minister+Dempsey...a.htm

(Or go to the home page and click on the link
www.dcmnr.gov.ie/)