State to cash in on oil strike

Saw this on the news yesterday.

independent.ie/national-news … 52549.html

I know prodcution is two years or so off, but could this help us get out of the recession?

Few more wells planned too. Every little helps!

I really hope so, although the numbers involved don’t sound likely to make a huge dent in the debt. But, as you say, every little helps.

One thing that worries me about the excitement shown by the Indo for this story is:

i would not say would get us out of a recession!

there will be the tax intake. the engineering will be carried out in the UK and manufacturing in either the UK or Germany. depending on where they transport the oil for refining, most likely not in ireland

and sure as hell some loophole in our exploration tax laws will emerge enabling the avoidance of as much taxation as possible.

I thought I read somewhere they’re planning to refine it in Whitegate in Cork?

i stand corrected!

They are only taxed on their profits.

And their profits can be written down against cost of exploring, equipment and a range of a thousand other things.

Ray Burke and Bertie Ahern put this regime in, Pat Rabitte seems reluctant to interfere.

The state basically won’t see a cent.

Well, oil companies are allowed to write off all expenditure on exploration, drilling, surveys, research, construction, storage and refining against profits.

Think how many years Providence have been at this, then double the numbers for 100% write of of all plant and machinery. Only after all of that is recovered, will the oil company move into taxable profit territory.

That could take 20 years.

the only thing the govt will get is extra PAYE/PRSI/USC on a few workers.

with the lack of success of exploration wells in Irish waters we need to be encouraging operators to move into the area

Every business can write down profits against costs - if they weren’t able to, how would you expect them to make a profit in the first place - or even break even come to that?

If there is a viable oilfield it will create jobs and there will be a rush from other companies to explore at which stage you could change new licensing terms so yes we will benefit from it

True. Up to a point.
But not up to the point that the oil exploration businesses can.

It’s a bit like how that the airlines don’t pay the same rate of taxation on their fuel that the mere mortals who drive motor cars do.

One rule for some, a different rule for others.

Ray Burke and Bertie Ahern put this regime in, Pat Rabitte seems reluctant to interfere.

Mr O’Reilly, who is a son of Providence’s largest shareholder, the newspaper magnate Sir Anthony O’Reilly.

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Every single bit of commentary on this topic (without any exception) goes exactly like this…

“This is a massive find of oil worth X billion euros, and a great day for the company and their shares are up 500%, but of course the Atlantic Ocean is a very tough place to explore for oil… very difficult geology… needle in a haystack… and fierce storms… thank God the oil companies are exploring for oil… aren’t they fabulous… the state doesn’t have the expertise to explore for oil… better to give it away and tax the profits… of course there won’t be any profits to tax because of the way they’ll structure the contracts but we can’t just leave it there for future generations, better to just give it away…”

How very Oirish. A good read about Sir Anthony and his oily fingers

Didn’t you see my rebuttal of txirimiri detail on the taxation of the oil companies? :imp:

For what it’s worth. I don’t agree with taxations and governments and all that.
There are other approaches to take.

Storms in the North Sea are not exactly to the same degree of magnitude of the atlantic but there are technical solutions (expensive ones).
If a perfect government was to propose a perfect taxation then I belive that there should be graded taxation rules with regard to Oil Exploration. Say at 5% taxation (based on volume of oil actually pumped and sold to be the taxable amount) for Atlantic, versus 40% taxation on land based production.

Deja vu - Atlantic resources.

I know people who lost a lot of money on this.

Good find Coles2

@wii4miinow, The point I was making was really about the coverage in the mainstream media. I wouldn’t dare try to predict the commentary of my fellow fringe lunatics.

pump and dump
the share price not the oil obviously
very old trick by the metal and oil industry especially small operators

re Pump and dump, Ivan Yeates of Newstalk has been “suggesting heavily” that this is very much pump and dump, however he is of course employed by Newstalk remind me again who owns them ???

Cheers Coles2. :slight_smile:

It was that pedant in me coming out!
:nin