Socialism, Shell, the Sindo, Sir Tony, and Selling the Family Silver.

mayo | anti-capitalism | feature

Thursday May 18, 2006 07:13

by Terry

Castlemartin, Kildare residence of O’Reilly

“Paramilitary style death threats have been made against workers on Shell's controversial Corrib gas pipeline project in Co Mayo, the Sunday Independent can reveal. The Sunday Independent has learned that two Scottish workers employed by the Norwegian-owned Statoil corporation were approached by a gang of men outside a pub in Belmullet and told they would be shot "in the back of the head".”

- Sunday Independent, July 17th, 2005.

People who suffer the misfortune of being regular readers of the rag known as the Sunday Independent may remember a series of literary assaults it ran last summer on the Shell to Sea campaign. As the weather improves and we enter a new ‘construction season’, so to does the chance of Shell attempting work, things hoting up here, and another parade of corporate media lies. So in the spirit of getting your retaliation in first here follows an exploration of the interests the O’Reilly Empire has in the privatisation of natural resources. Growing naturally from this is a look at what is entailed in that privatisation, at fresh developments in oil and gas in Ireland, and at the political issues involved in campaigning around this.

Whose “news”?

The massive media wing of the O’Reilly Empire is well known: The Sunday Independent, by far the most widely read Irish Sunday newspaper, with a circulation of 291,323, the Irish Independent, with a circulation of 82,771, the Star, the Sunday World, and the Evening Herald, the later with a circulation of 92,510, plus a large slice of the local newspapers north and south, including those owned by the Belfast Telegraph group. In Britain Independent News and Media (INM) plc publishes the Independent and the Independent on Sunday.

The company also owns 14 titles in South Africa, making it the biggest newspaper publisher there, and Australian Provincial Newspapers, a major operator in Australia and New Zealand, with further business in South East Asia.

O’Reilly’s entry to South Africa was eased by his friendship with tin pot dictator Robert Mugabe (erstwhile leader of an “anti-imperialist struggle”) who had a close relationship with the then South African government headed by Nelson Mandela (ditto).

The INM website describes the company thus: “Spanning four continents and 21 individual countries, INM is the market leading newspaper publisher in Ireland, New Zealand and South Africa and is the market-leading regional newspaper publisher in Australia and India. In the United Kingdom, Independent owns the largest newspaper group in Northern Ireland and publishes the quality, award winning, Independent titles from London. Across these regions, the Group publishes over 175 newspaper and magazine titles with a weekly circulation of over 31 million copies and operates over 70 on-line editorial and classified sites.”

Our Gas.

“Later he [Sir Tony O’Reilly] would dwell angrily on the political mishandling of Ireland’s natural resources policy, which he reckons is the real story of Atlantic Resources. In the early 1970s, he would argue, there was a simplistic public notion that Irish oil and minerals belonged to the Irish people at large – what O’Reilly called a sort of Sinn Fein mining policy – which was to prove utterly destructive.”

- Ivan Fallon, in ‘The Player’, a fawning biography of Sir Tony.

The oil and gas wing of the O’Reilly Empire, Atlantic Resources in the 80s, and Providence Resources today, has not been as successful a venture as the media colonies.
The CEO of Providence Resources is Tony O’Reilly Jnr, who said in October 2005 that: “I view it as a type of off-shore property company. Our focus is to create more value tomorrow than we have today. There is no doubt that this is the best time to be in the oil and gas industry.”

In February of this year Providence Resources made a deal to jointly exploit the Dunquin Prospect off the coast of Kerry with Exxon Mobil (Esso), the world's largest oil and gas company. Dunquin contains, according to Providence Resources, 25 trillion cubic feet of natural gas and four billion barrels of oil.
The company also has interests off the coast of Waterford and Wexford Celtic Sea Operations, as well as the Spanish Point/Burren discoveries off the coast of Clare.

Its operations outside Ireland and the U.K. are in none other than Nigeria.

Fallon’s biography describes O’Reilly, in the 1980s, as passionate about the search for Ireland’s oil, which, it goes on to say: “was to prove the most costly and disappointing venture of his corporate career, a black hole into which he poured millions of pounds of his private wealth, never to produce a single barrel of oil.”

His exploration company, Atlantic Resources, had a see saw share value which eventually nose-dived as a much hyped joint operation with Gulf off the south east coast came across naught but what O’Reilly described as a ‘puddle of oil’.

As the quote which heads this section shows the failure of his dream in the 1980s is something he accredits to the tax regime then applicable to oil and gas exploitation, which is described in glaringly exaggerated terms.

All in all the interests of who controls the media being, in this case in particular, so blatantly hostile to our interests, the need to build our own media cries out to the heavens for attention. Remember indymedia is what you make it.

Background.

“The politicians who sold Ireland's family silver in the great oil and gas give-away The massive finds of oil and gas on our western seaboard could ensure Ireland's financial security for generations. Wealth approximating that of the Arab countries is within our grasp, but the Irish government seems content to sell off our birthright for a handful of votes and a few dollars.”

- Magill magazine, March 2002.

“No other country in the world has given such favourable terms as Ireland.”

-Mike Cunningham, former director of Statoil Exploration (Ireland), former chair of the Irish Offshore Operators Association’s Environmental Committee and Labour Relations Committee. (Quoted in Magill magazine, March 2002)

With Marathon, the operators of the Kinsale field and part owners of Corrib, being given a large slice off our southern coast for 500 pounds by Des O’Malley in the late 60s, this became an election issue in 1973. Subsequent government policy was that the state could have an up to 50% stake in any commercial find (that is that the field would be jointly developed by a state company), with production royalties between 8% and 16%, and a standard corporation tax of 50%. In addition at this time Marathon had to sell to Bord Gais at a reduced bulk discount.

The major figures in whittling this away to the current situation were Ray Burke and Bertie Ahern in 1987 and 1992 respectively. Today there are no royalties, no potential state participation, and a 25% tax rate. Furthermore there is a 100% tax write-off meaning multi-nationals can count their production, development and exploration costs, back 25 years, as ‘tax’ and hence pay less tax, or even conceivably no tax. In addition the licenses issued in the current period mean companies can have control over areas for decades, an encouragement for speculative practises.

Contrary to what would be suggested by the claims made by O’Reilly, the difference between the 1975 situation and the 1992 situation did not have a significant impact on attracting oil and gas exploration. 26 exploration wells were drilled between 1992 and 2004, compared to 100 between 1975 and 1992.

Amoco, BP, Burmah, Chevron, Conoco, Elf, Esso/Exxon, Enterprise, Gulf, Marathon, Shell, Texaco and Total all failed to find commercially viable fields, apart from Kinsale, Seven Heads and Corrib. Seven Heads adjoins Kinsale and is something of a loss maker. However, with much of the exploration occurring 3 decades ago, advances in technology can change the meaning of “commercially viable”. In addition a new United Nations agreement expands Irish territorial waters further into the Atlantic, with more potential finds, and there is always the possibility of, as suggested by Peak Oil theory, a scramble for whatever can be taken, as stocks dwindle and prices rise.

Another line trotted out by the Independent group newspapers, and Fergus Cahill of industry lobby group Irish Offshore Operators Association, is that of self-sufficiency and security of supply. This especially in the aftermath of the recent Russo-Ukrainian gas dispute which saw much of the supply to Central and Western Europe threatened. However while under the 1975 legislation the state could take over production in the event of an emergency, no such provision exists now, and any energy resource will be sold, at the full market rate, to whomsoever will pay.

All the seas surrounding Ireland are divided into blocks for the granting of exploration licenses, and there has also been poking around inland. Finavera, which also run a renewable energy wing, owns 100 per cent of the 1,630 sq km field in the Lough Allen basin, which crosses Sligo, Leitrim, Cavan and Fermanagh. Tom Davitt, its CEO claims "The Lough Allen natural gas field has the potential to change the energy dynamic of Ireland and the UK,".

Who runs the bakery?

It is no use to see a greater role for the state in natural resources in terms of socialism or sovereignty, because state companies are controlled by the state, not the ordinary people (see the E.S.B. for instance). However, a look at other places such as Norway shows we could gain significant benefits in terms of education, health, and social welfare from such a policy. Moreover this is yet another example of the class bias in taxation, with 85% of income tax being paid by PAYE workers, tax evasion amnesties for the super rich, and an abnormally low corporation tax by E.U. standards. O’Reilly himself has long avoided being taxed.

The privatisation of natural resources should not be seen as some isolated instance, or something occurring only in Ireland. It is a part of the neo-liberal strategy of privatisation and casualisation embarked on by capital since the mid-70s, and recently encountering such resistance as Bolivia’s water and gas wars or France’s anti-CPE struggle, and most obviously manifestating itself in Ireland right now as the proposed privatisation of Aer Lingus.

A problem in opposing this is the tendency to pose the (partially) previous existing state of affairs as an alternative to the one currently existing, for example in some European contexts, full employment with secure jobs, versus temporary positions and a permanent body of unemployed, or state ownership versus private ownership.

If state ownership of an industry can give a better service or better employment conditions well and good, if greater taxation of gas production can give us a better health care system well and good, but we shouldn’t forget that, as it was put by the British libertarian-socialist group Solidarity: “Anyone who wants three square meals a day and the prospect of endless employment can find them in any well run gaol IT FOLLOWS that we don't denounce capitalism primarily on the basis of its inadequacies in these fields. Socialism, for us, is not about transistors for the prisoners. It is about the destruction of the industrial prison itself. It is not only about more bread, but about who runs the bakery.”

So we might say that while the part of the campaign against Shell’s development that has the most potential to broaden the struggle, and link in with the concerns of wider sections of the country, are the aspects around the privatisation of natural resources, perhaps deeper and more radical implications are contained in the issue of who makes the decisions about what development takes place in a community.