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“These resources belong to the Irish people”

By: 
Maria Tracey - The Cork News

Local appeals to bring a valuable oil field off the Cork coast back into public ownership have been rebuffed by the State, with a government spokesperson telling The Cork News that Providence Resources has the right to produce the natural resource within the licensed area.

Calls had been made to the Minister for Energy and Natural Resources, Pat Rabbitte to take Barryroe into public ownership after Providence outlined this week that there may be between one billion and 1.6 billion barrels “in place” at the oil field, four times as much as originally expected.

Cllr Ted Tynan of The Workers’ Party stated that according to Article 11 of the Constitution of the Irish Free State Act, 1922 “all natural resources, in or under the State’s jurisdiction, belonged to the State”.

“These resources do not belong to the O'Reilly clan, they belong to the Irish people and it is we who should benefit from their exploration,” Cllr Tynan said.

He added that under the present taxation arrangements with exploration companies, the “State will benefit little from the Barryroe find”, highlighting that the average tax take on any profits would be 20%, with no provision for royalties.

“This compares very badly with countries such as Norway and Venezuela, both of whom take 80% of the wealth of their oil and gas fields, and both also have successful state owned companies to explore for and develop their natural resources,” he said.

“This means that as things stand, the State's take during the whole lifetime of the Barryroe well, based on current oil prices, and the company’s cost of development figures of $500 million would be just €20 billion. Whereas with State ownership of the well, this could be at least €100 billion over 30 years."

He added that the Government “owes it” to the Irish people to ensure that this “once in a thousand year opportunity" is not “squandered”.

However, a spokesperson for the Department of Communications, Energy and Natural Resources outlined that while oil and gas in the Irish offshore are owned by the State, companies are invited to apply for exploration authorisation and to invest their own resources in exploration activities aimed at establishing the presence of resources in commercial quantities.

“In return for taking this risk a successful exploration company is given a right to produce oil or gas from within its licensed area, subject to it applying for and being granted a number of statutory consents,” he said.

“Ireland benefits financially in a number of ways. Firstly from the tax on profits—where a tax rate of 25% to 40% applies—and secondly from the wider economic activity generated by the development phase of a project in particular. Ireland can also stand to benefit from a strengthening of our energy security of supply.”

Posted Date: 
27 July 2012