THE MANAGING DIRECTOR of an Irish oil and gas company has said that Shell’s handling of the Corrib gas controversy is a “case study in mismanagement”.
A Shell to Sea slogan painted on an abandoned house just outside of Rossport village in Co. Mayo
David Horgan is the managing director of Petrel Resources, which has annouced today that it has applied to drill for oil in blocks in the Porcupine Basin off the south-west coast of Ireland. The company was founded in Ireland in the eighties, but following unsuccessful operations in the Kish Basin, the Celtic Sea and the Porcupine Basin, and then in the US, the company moved its explorations to Africa and Iraq.
Horgan told TheJournal that the decision to drill for oil off the Irish coast is like an “intelligent gamble”, and compares it to buying a racehorse – it might not win a single race, or it could make you very very rich.
Horgan also said that the threat of resistance from local people, or “resource nationalism” is a genuine concern, but one which is a fact when it comes to exploring for resources like oil or gas. He said that it’s “just something that has to be managed” but that it isn’t the biggest problem; finding oil is the problem.
You’ll never satisfy the left or the extreme nationalists. You’ll always have your crackpots but resource nationalism is a fact of life.
Referencing the documentary The Pipe – which chronicles the dispute between locals in North Mayo and the Shell company laying a gas pipeline – Horgan said it was “incredibly one-sided” but that it was also a case study in mismanagement on the part of Shell.
Horgan told TheJournal that going into Mayo meant dealing with “tough people whose background is scrambling a living off bad land”. He said that the concerns of local people remain the problem of the company until those problems are settled. Hiding behind PR people is not the answer, he said, and as a senior executive “you have to show your face” and speak to the media.
Horgan said that Shell’s mistake was laughing at people when they voiced safety concerns, and that someone in authority needed to speak with the locals. He said that he would have taken local representatives to see similar facilities elsewhere in the world and would have offered anyone living within 100 metres of the pipeline free gas for 20 years. Horgan feels that that kind of money is insignificant when it comes to the profits that can be made from oil and gas:
Paying off local people in a legitimate, lawful way goes a long way.
Speaking about Petrel’s plans to drill in the Porcupine Basin, Horgan said that technology has moved on and that Ireland is very attractive in terms of its tax rates, and that a successful oil find could mean a huge amount of money for the exchequer.
Former Minister for Communications, Energy and Natural Resources Eamon Ryan put in place a tax system whereby oil and gas companies pay 25 per cent tax on their profits, but if they have a bonanza discovery this tax rate goes up on a sliding scale, up as far as 45 per cent. Horgan says this move was an intelligent one in the eyes of the industry.
Location of the Porcupine Basin. Image via Dept of Communications, Energy and Natural Resources
28 June 2011