TONY ALLWRIGHT,
Sir, - David Smith (July 31st) find incomprehensible the "scandal" of the Irish Government settling for a 12.5 per cent take from the Corrib gas fields, when the Norwegian oil tax is a "thumping 78 per cent".
Incomprehensibility disappears when you look at the facts of hydrocarbon business life. Despite the hundreds of millions spent exploring here over several decades, Ireland is a dreadful oil and gas province. It has no oil and only two small gas fields. Kinsale, containing 1.7 TCF (trillion cubic feet, 1 TCF being equivalent in energy terms to about 0.17 billion barrels) started producing gas back in 1978. And now Corrib, with 0.85 TCF, is planned to come on stream in 2004.
Compare this with the Norwegians. They began their highly successful exploration in the 1960s and to date their proven reserves are 36 TCF of gas plus 5.7 billion barrels of oil, with the same amount again not yet proven. So perhaps Norway's gargantuan hydrocarbon riches explains why its government can drive such a hard bargain with oil companies, compared with the driblet - 1/27th of Norway's production - that Ireland has to offer. So without a competitive tax regime considerably more favourable than Norway's or the UK's, Ireland would have no chance at all of attracting the €840 million needed to develop Corrib. - Yours, etc.,
TONY ALLWRIGHT, Killiney, Co Dublin.