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Irish hope for Norway oil help

By: 
Ingeborg Eliassen - Aftenbladet

Enormous oil and gas reserves could save Ireland’s economy but inhabitants are protesting. The Irish have now asked for assistance from Norway.

“We’re in the early stages and have no formal dialogue, but we might be able to achieve this,” said Norwegian Foreign Minister Espen Barth Eide on a visit to Ireland, Tuesday.

He met with the Irish legislator who has spearheaded sharpening getting the Irish state more bargaining power in negotiations with oil and gas giants.

Company tax in the debt-burdened country is among the lowest in Europe. Oil companies that pay 78 percent tax on their earnings from hydrocarbon production on the Norwegian Continental Shelf can reduce this to 25 percent in Ireland.

This is conditional upon progress in recovery of what may be vast oil and gas deposits off the Irish coast.

Poisonous conflict

Ireland may be standing on the brink of an oil adventure, but it has been long in coming. The gas field discovered in 1996 is still not in production.

This is particularly due to strong protests from the local community. Shell owns 45.5 per cent and Statoil 36.5 percent of what has turned into a conflict regarding the Corrib project.

“What has happened here, would never have been tolerated in Norway, says Maura Harrington, a spokeswoman for Shell to Sea, one of the groups fighting against the Corrib development, to Aftenbladet.

Stepped-on

The activists believe the development is a gift to the oil companies, and - apart from some jobs - will just inflict damage on and cause expenses for Ireland and the community.

The 60-year-old retired teacher has both been on hunger strike and sat in jail for hindering the project, which according to Shell to Sea carries gas pipelines close to people's homes, as well as locating a refinery in and laying pipes across a vulnerable and EU-protected area.

Many believe a more attractive solution may lie in the seabed: Discoveries of what could be 2.8 billion barrels of oil contained in the field were made last autumn. A 2006 study estimated 10 billion barrels of oil and gas. Nevertheless, a report last autumn predicted reserves of 21 billion barrels, according to publication the Irish Examiner.

Maura Harrington has lost confidence in the government. Norwegian aid will not be anything more than window dressing before requirements and conditions for the oil industry are changed drastically, she says.

“It's too late. The government has relinquished control over the offshore areas of our industry. Norway was tough regarding oil companies from the start. You now have an almost embarrassingly large pension fund. The situation for Irish communities, however, is as in Ogoniland in Nigeria - oil is a curse,” she claims.

Norwegian advice

Foreign Minister Espen Barth Eide and Irish Christian Democrat Andrew Doyle met under the Norwegian politician’s visit. Mr Doyle MP, leader of governing Party Fine Gael, spearheaded the report the National Assembly’s Energy Committee put forward last spring.

This contained proposals with which measures Ireland should take to ensure national control over oil and gas exploration when meeting oil companies. Norway heavily inspired these 11 points.

Norwegian government and public officials oriented elected Irish politicians on how Norway has solved crucial questions of taxation, ownership of knowledge about the seabed, allocation processes, and transparency.

The committee’s main goal was to find a balance that gives the government far more revenue without scaring away the offshore industry. The Doyle report recommends taxation levels are raised to at least 40 percent, with a sliding scale up to 80 percent for "very large commercial discoveries."

Posted Date: 
26 May 2013