‘Conned’ – A German view of Ireland

Sir, – I refer to the article by Christian Zaschke, first published in the Süddeutsche Zeitung and reprinted in The Irish Times (Weekend Review, July 6th). As far as the section on oil and gas is concerned, it would be tedious to dissect the article line by line. Just two points, then.

Firstly, simplistic comparisons of headline tax rates lead to wrong conclusions. For example, a well (the only one this year) is currently being drilled off the Irish west coast, reportedly at a cost of some €200 million. If the well is dry, every cent is lost. In the same circumstances in Norway, the Norwegian government would refund around €156 million to the partners. This fact is rarely mentioned by those applauding the Norwegian tax system.

Neither do they refer to the fact that Norway allows a write-off of 130 per cent of the capital cost of a development project as against just 100 per cent in Ireland, or that up to this year Norwegian companies were allowed to write off losses incurred anywhere in the world against revenue in Norway, which is not allowed in the Irish system, or that your chances of making a commercial find in Norway are at least five times better than in Ireland.

Secondly, if the Irish system is such a giveaway, why isn’t there a queue for licences? Drilling in Irish waters has been running at one or two wells a year for the last decade, as opposed to perhaps 80 or 90 a year in the North Sea. A recent licensing round in the UK resulted in the award of 167 licences. Our most recent round produced just 13 licensing options. The Irish round before that attracted only two applications, both for the same acreage, so just one licence was awarded. It seems that the oil industry just doesn’t recognise a bargain when it sees one!


We welcome debate, but let it be dispassionate and informed, rather than emotional and ill-informed. – Yours, etc,


Irish Offshore Operators’


Fitzwilliam Business Centre,

Upper Pembroke Street,

Dublin 2 .

Sir, – Andrew Doyle TD (July 9th) might do well to take note of how much tax multinational companies actually pay in this country. Conned? Yes! – Yours, etc,



South Ballina,

Co Mayo.