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Sharing energy with Norway

Letters to the Irish Times - 25/08/11

Sir, – Fintan O’Toole is clutching at straws (Opinion, August 23rd). He accurately describes the failings of political and administrative culture, but deftly ignores the factual arguments Minister for Energy and Natural Resources Pat Rabbitte presented (Opinion, August 18th) in his reply to Mr O’Toole (Opinion, August 16th).

If our oil and gas is being given away, why is the Atlantic seaboard of Ireland not overrun with prospectors drilling holes for oil and gas like there is is along the Atlantic coast of Norway? One reason is that the Norwegian taxpayer underwrites the substantial cost of drilling and exploration of oil and gas by multinationals in Norwegian territorial waters at the cost of billions to the Norwegian exchequer. Are Fintan O’Toole, Sinn Féin and others seriously expecting us to cut our health and education services to pay billions in exploring the Atlantic seabed when we could get multinational companies to do this instead? Under the existing regime, if their prospecting is successful it will be taxed and provide considerable benefit to the exchequer.

Part of the failure of Ireland’s political culture stems from failure by elements in the media in providing the relevant facts for citizens to make a rational judgment on public policy. Mr O’Toole lets himself down when he sidesteps “facts” asking that we substitute them with “guts”. – Yours, etc,


Kingswood Heights,

Dublin 24.


Sir, – Fintan O’Toole (Opinion, August 23rd) cites figures I published recently about the projected tax take from the Corrib Gas field. It is important to add that this very low tax figure is not due to the delays to the project. The €340 million figure – from a 2003 study carried out for Shell – was based on an assumption that gas would start flowing in 2005.

Corrib is now valued at around €13 billion. Even allowing for the fact that the gas was worth less in 2003 than it is now, I estimate that this projected tax take of €340 million represented no more than 7 per cent of the revenue Shell would have generated by selling this Irish gas back to Irish consumers.

Other supposed benefits from oil and gas exploration under Ireland’s licensing terms are also illusory. As companies can export directly from the field, increased exploration will not result in Ireland having a secure, domestic supply of oil or gas. – Yours, etc,


Portmahon Drive,

Rialto, Dublin 8.


Sir, – Pat Rabbitte (Opinion, August 18th) responded to Fintan O’Toole’s article (Opinion, August 16th) by stating “The reason why a higher rate applies in Norway is straightforward: the strike rate in Norwegian waters is incomparably better”. As ever, things are not straightforward. While the “strike rate” is high now; that wasn’t the case when Norway prepared for potential finds.

A letter from the Norwegian Geological Survey made the position clear to the Norwegian minister of foreign affairs in 1958: “The chances of finding coal, oil and sulphur on the Continental Shelf off the Norwegian coast can be discounted”. Norway looked unlikely ever to become an oil nation.

Then Esso and Shell discovered gas at Groningen in the Nethernlands in 1959, prompting a number of oil companies to turn their attention to the North Sea.

Norway’s turn came in 1962 and the responsible civil servants and ministers prepared for the event by establishing Statoil.

With a holding of 67 per cent, the Norwegian state is the main shareholder in Statoil. The owner interest is managed by the Ministry of Petroleum and Energy.

The Norwegian state is eager to communicate its expectations to companies in which it has interests, and to communicate to society how the state is to act as owner.

Some 250,000 people in Norway are in jobs in the oil and gas industry or related jobs.

Justin Keating tried to prepare Ireland for “our turn”, not believing blindly in the reported “strike rates” from the oil industry and was dismissed by Ray Burke and subsequent ministers including Pat Rabbitte, whose article is a sad reflection on the different attitude of the Norwegian and Irish governments. Norway’s gain and Ireland’s loss.

It is worth noting that Statoil owns Irish gas wells.

Mr O’Toole has a very good point in arguing that Ireland would have benefited from co-operation with the Norwegian state. – Yours, etc,


Rossport South,

Ballina, Co Mayo.


Sir, – Fintan O’Toole (Opinion, August 23rd) returns to his favourite theme in less than one week. His previous article (“Let’s make Norway joint owner of our oil and gas”, August 16th) is tempting fate. I suspect the Norwegians would have nothing to do with us given the experience in Co Mayo where the issue is safety (despite all evidence to the contrary) and not tax rates. When they look at the experience of Shell and Statoil here who were supposed to have gas running in 2002 at cost of about €700 million and are still struggling many years later after already expending €2.5 billion and rising amid continuing protests, they will say no thanks.

At best it will be about three years’ time before we see the gas flowing. Mr O’Toole says there may be little tax yield for the State as the company can write off expenses against tax yield. So the longer the protests and expense escalate the less the State will get. I hope this is not lost on Mr O’Toole and those who protest.

It is good and proper that Pat Rabbitte tells it as it is in relation to our oil and gas industry (Opinion, August 18th). Those who make the comparison with Norway do not take into account the success rate there as against the hazards of drilling in the Atlantic off the west coast of Ireland and where there are supposed to be huge reserves of oil and gas according to some people without any real evidence to show us. Mr Rabbitte said on another occasion, 60 per cent of nothing is still nothing and he is correct.

Perhaps some reality on Mr O’Toole’s behalf might be appropriate here. – Yours, etc,


(Pro Gas Mayo),

Ballina, Co Mayo.


A chara, – If Fintan O’Toole is correct, the gas and oil deal is a terrible one for Ireland (Opinion, August 23rd). If Pat Rabbitte is correct, it’s the best deal available, but still a terrible deal (Opinion, August 18th). Based on either view, the most pragmatic approach is to leave it where it lies until a better deal is on offer.

Better that a future generation should have the benefit than giving it to some multinational for a pittance now. – Is mise,



Blackrock, Cork.

Posted Date: 
28 August 2011