Union advised `hard' assessment of oil and gas reserves required

Hard independent evidence on the amount of oil and gas beneath Ireland's seabed territory must be placed in the public domain "as a matter of priority", according to an unpublished economic briefing for SIPTU on the offshore exploration industry.

Only then can the fairness of the current tax regime for exploration companies be assessed, according to the internal briefing prepared for the union. Although the 1992 fiscal terms were set to arouse interest in a sector which has shown little enthusiasm for exploring Irish waters, this approach may be simple "game-playing" to get the Government to reduce taxes further, the paper suggests.

The briefing, prepared last year, notes that Statoil's Sarsfield prospect in the south Porcupine is considered "particularly robust", while the most important field of proven commercial potential is Corrib North - which, it says, will supply some 70 per cent of Ireland's natural gas requirements to at least 2015 when in full production.

The briefing examines the reluctance of exploration companies to employ Irish labour, the boycott of an Enterprise Oil contracted supply vessel in Foynes by dockers in 1998, and the ["]strong anti-union position["]

of Enterprise Energy Ireland.. It notes that while the drive for employment continuity appears to be a significant factor in limiting opportunities on short-term drillings, it is "no excuse" for not hiring Irish workers on permanent locations.

"Therefore it should not be accepted as an excuse for Enterprise Oil or its contractors to discriminate against Irish labour in developing the Corrib North location," the paper says. Claims that the industry is reluctant to hire Irish labour due to a fear of information flowing back to shore are "difficult to prove", it adds, but are consistent with the relatively "soft" position that the Government had adopted regarding oil tax "and cannot therefore be discounted".

Statoil has made a point of offering employment on the Sovereign Explorer rig off Kerry to qualified Irish candidates, through the contractor Transocean Sedco Forex. Some 23 candidates have been offered work on the rig - which will employ 100 in total - as a result of interviews conducted in Limerick and Cork.

The move has been welcomed by Mr Fergus Cahill, chairman of the Irish Offshore Operators' Association (IOOA). The IOOA and FAS conducted the recruitment campaign, and the association is funding initial training in Cork. It demonstrates the industry's commitment to affording full and fair opportunities to Irish goods and services, Mr Cahill says.

The IOOA has taken issue with a comment made by SIPTU's offshore committee spokesman, Mr Padhraig Campbell, in relation to the employment initiative. Mr Campbell had described it as "window dressing". Mr Cahill believes the IOOA has honoured the spirit of an agreement entered into with the union through the framework group, set up as a liaison between various players in the exploration sector. Mr Noel Dowling, SIPTU representative on that group, had welcomed the progress made on providing employment at a framework group meeting on April 6th, Mr Cahill emphasised.

Commenting on the Minister's recent indication that he might review the fiscal regime set in 1992 at the end of this year, Mr Cahill said that the IOOA had no problem with a review of terms in future licensing rounds, as this was the Minister's prerogative. However, it would have "serious problems" with any review during the lifetime of existing licences as these represented a contract between the Government and the operator, Mr Cahill said.