Thursday 2 July 2009

Ryan rules out Corrib gas deal re-negotiation

ENERGY Minister Eamon Ryan has ruled out any chance of the Government renegotiating the Corrib gas deal with Shell and its partners after admitting any changes would damage Ireland’s reputation abroad.

Despite calls by groups for a share in the west of Ireland project, Mr Ryan defended the Government’s tax take on the controversial gas deal.

Most of the contracts around bringing the Corrib gas into the Irish market were signed, he said adding: "What we didn’t want to do and what the State is reluctant to, particularly when you’re dealing with corporation tax, is to start changing deals that you’ve already done.

"If we started shifting our tax rates all over the place, particularly on projects already signed and projects that have already been agreed, it would have a reputational damage for the State."

Under the present terms, Shell and its energy company partners will have to pay the State 25% of its profits from Corrib but only after exploration costs have been recovered in the project.

The Green Party managed to change the corporation tax on gas and oil exploration to 40% in 2007 after forming the coalition government.

However, the new tax will not be backdated.

Mr Ryan did admit yesterday, however, that the previous terms for energy companies exploring on Irish territories had been too lenient.

"Yes, I thought that we were too cheap, that the terms were too favourable," he told RTÉ radio.

Afri, an Irish group that campaigns on human rights and justice issues, wants Ireland to be given a share or royalties in the Corrib gas deal.

Afri chairman Andy Storey yesterday reiterated concern that Ireland had been given a raw deal on the Mayo project, noting that tax rates were higher in Norway and Britain on gas and oil exploration.

Mr Ryan said this was because both countries were positioned in the North Sea, which had lucrative reserves.

Other countries like France Portugal and Spain had even lower tax rates for exploration than Ireland.

Afri estimates the Corrib project could be worth in excess of €10 billion.

"Our proposal is to move away from the focus on taxation, which at the moment is the only thing we might get something out of, and to renegotiate the deal so that the Irish State actually takes a stake or simply a shareholding.

"It doesn’t seem unreasonable that at a figure of 10% or 20%, that the Irish State would actually get €1 billion," said Mr Storey.

Afri says the Corrib gas deal with Shell could be renegotiated on legal grounds, including claims the company has not followed the best health, safety and environmental practices.

Meanwhile, a Corrib gas protester whose boat has been seized by gardaí has revealed he has been forced to go on the dole.

Fisherman Pat O’Donnell and his son Jonathan also told Hot Press magazine that the family shellfish factory, employing an additional seven workers, was also expected to close because they cannot access fish for processing.

Protesters have claimed an exclusion zone has been set up off the Mayo coast since the arrival of the giant pipe-laying Solitaire vessel in the area.

Irish Examiner

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