By Nathan Argent
Last week, Norwegian oil company Statoil used the pages of the Northern Advocate to make what we believe to be false claims about the economic benefits their drilling would bring to our shores.
They said there “is no doubt that most of the income would go to New Zealand”. This is simply not true.
Official figures clearly state that depending on the outcome of Statoil’s exploratory work, the Government would receive a payment of 5 per cent ad valorem royalty (AVR) on the basis of the sales prices received, or 20 per cent of the accounting profit revenue (APR) which reflects a share of the profits once all significant costs have been recovered by the producer, depending on which is greater.
In addition, Statoil would have to pay corporation tax.
This is not “most income”. Corporation tax plus either AVR or APR will mean that Statoil will in fact pocket the majority of any income and take it home to Norway.
Why make such wildly inaccurate claims? Statoil is a publicly listed oil company whose purpose is to maximise profit for its shareholders. It’s all about lining the pockets of wealthy Norwegians.
Statoil is looking for oil in New Zealand because we have one of the lowest royalty rates in the world. A royalty is the cut the government gets from any profit made by overseas oil companies from exploiting our resources. And to quote the government, “the lower royalty scheme is an incentive for explorers and operators to invest in New Zealand”.
Job creation and building strong, lasting communities and business opportunities is hugely important. Statoil’s false claim, and attempt to misinform the readers of the Advocate, suggests that this company cares little for these things.
Investing in a cleaner, smarter future, and powering our country by cutting-edge green technologies could give our economy a multi-billion-dollar boost, and provide tens of thousands of jobs. The oil industry cannot match these figures.
Statoil also compares the technique of seismic testing to a pregnancy ultrasound. Seismic testing is known to cause harm to marine life and has been linked to whale strandings, where as an ultrasound is used to determine the signs and development of life. The principles may be arguably similar, the effects very different.
Going to the depths of our oceans and risking our coastlines for the last drops of oil is as dangerous as it unnecessary. Oil drilling not only risks our pristine coastlines, but our continued dependence on burning it is a major cause of climate pollution.
And whatever side of the debate on this controversial issue you sit, it’s vital it is conducted in an honest and accurate way.
Unfortunately, it seems that Statoil is not willing to do so.
Nathan Argent is the Policy Advisor for Greenpeace New Zealand based in Wellington