A few points on the matter
Why was that particular deal struck at that time (1994) by the government
- to secure a source of fuel
- to encourage other companies to follow suit
- to build some tax revenue
- to build local jobs near the find
The times have changed
- shell needs us more than we need shell (peak oil)
-- fewer new finds in the face of higher demand (growing demand from China)
-- friendly political environment (think BP's CEO in Russia, Nigerian oil rig pirates, Sharia law in Arab states and Chavez)
- we can keep the local employment as now that there is a secured find and some other company will move in with a lower initial investment cost.
- the replacement will still extract the gas into the Irish grid.
- Ireland will get far more in taxes and rent in a time when it needs it.
- local jobs will be a necessity and condition of future licences. (the replacement will not get Shell's licence but will have to get a new one).
The lynch pin
- the corrib licence is not valid as clause 13.2.a from Act No. 7/1960 * is not satisfied, this is the act under which the licence was awarded to Enterprise Oil (since bought by Shell) . The "such ways" in the act refers to the such ways as stated earlier in that same clause not anything that enters the Minister's mind. And "petroleum" includes natural gas.
And don't go thinking that Act No. 9/1992: 251.55 ** gets them out of it. It just allows the Minister to give them short fall money and has nothing to do with avoiding their obligations under Act No. 7/1960.
We currently only gain directly from Shell in corporation and capital gains tax, which their expert accountants are reducing to nil as we speak. These taxes (CT/CGT) are not fines, preliminary payment(s) or rent (royalty rent) as stated in the act. This is why the licence cannot be disclosed to the public as all involved know that it is illegal, a bit of old school governmental secrecy. I wonder how quickly they will write in a £1 rent clause into the old licence contract, of course they will have to show that that money was paid at the time of issuance of the licence by Enterprise Oil. I doubt if any bank in this climate is willing to throw their neck on the block to 'find' such a payment in the face of their mortgage holders who will benefit from the voiding of the licence.
The situation is a face off between Shell and Ireland. Shell says that if they go then no OPEC supporting company will replace them. Call their bluff. They will loose the licence as it is invalid in a court of law and their buddies will stab them in the back in a heart beat. Once the replacement company gets one well going, then getting investment into researching other close-by possibilities, in a peak oil era, will be a piece of piss. And then we are in the money.
So it is time to grow a pair and harness that dragon for our benefit (and its too).
*Act No. 7/1960: 13.2.a
(2) The following provisions shall apply in relation to every petroleum lease—
( a ) such lease shall be made subject to the payment to the Minister of such moneys, whether by way of fine or preliminary payment or by way of rent (including a royalty rent) or by any or all of such ways as the Minister, with the concurrence of the Minister for Finance, shall think proper and shall agree upon with the lesseehttp://acts.oireachtas.ie/zza7y1960.5.htmlhttp://www.dcenr.gov.ie/Natural/Petrole ... lications/
**Act No. 9/1992: 251.55
If the total amount paid by the lessee under a petroleum lease as such lessee in respect of rent, royalties, income-tax, sur-tax, corporation profits tax and rates for any period exceeds such amount as the Minister, with the consent of the Minister for Finance, may determine, a payment, equal to the excess, may be paid by the Minister for Finance out of the Central Fund or the growing produce thereof for the purpose of payment to the lessee.http://www.irishstatutebook.ie/1992/en/ ... 9y1992s251
but nationalising our tiny offshore reserves is economic suicide.
How can we nationalise our tiny offshore reserves when they are already ours