Far from contributing to the national exchequer, the oil companies that have received every assistance from the government to pursue their drilling schedule in the sea off Aljezur, have been benefitting from multi-million tax breaks.
The excuse used by Jorge Seguro Sanches, controversially handing Galp-ENI an extension to its drilling licence, was that the consortium already had invested heavily in exploration, hinting that the State might be sued if it did not oblige. This now can be set against up to €270 million in tax breaks that Galp and ENI, through its Saipem subsidiary, have enjoyed in the past decade.
Environmentalists now are accusing the Government of subsidising the oil companies that are set to drill off the Vicentina coast in the face of overwhelming public opposition that the government continues to ignore.
The environmental movement, Climáximo, has been putting some figures to the claim that taxpayers have been subsiding these oil companies,
"Between 2010 and 2016 the oil companies GALP and ENI (through its subsidiary Saipem) received, respectively, around €70 million and €201 million in tax benefits," said the environmental NGO, adding that “the fallacious argument made by the Secretary of State of Energy, that he had authorised drilling at sea because the companies "had already invested €70 million," is therefore exposed: three governments already have given almost four times this value in fiscal benefits to the oil companies."
According to the environmental movement, "the whole process of oil concessions in Portugal is covered by a huge blanket of opacity and lies," arguing that "the government must revoke the authorisation of the Aljezur test well and cancel those concessions still in force."
Climáximo has consulted data published by the Tax and Customs Authority to see by how much the oil companies have benefitted from, between 2010 and 2016. It found Galp saving €70 million and ENI’s drilling subsidiary, Saipem, saving about €200 million, courtesy of taxpayers.
Such was the taxpayers’ unwitting largesse in 2014, that Saipem Portugal "was the largest recipient of tax benefits in the country."
Climáximo does not hold back in stating the government, through the Secretary of State, deliberately twisted the truth when claiming the oil companies were out of pocket to the tune of €70 million in exploration costs as this was but one side of the equation.
The NGO today issued a statement that encapsulates the current arguments of the anti-oil movement.
“After the successive challenges to the drilling of this hole, the deep disregard for the opinion of the population, environmental movements and local councils, this new chapter in the history of oil concessions in Portugal further stains an already dirty process with the ignominy of direct support with taxpayers’ money.
“The current government, which does not miss an opportunity to publicise its commitment to combating climate change, still supports investment in fossils and fills the oil companies’ coffers with €265 million in tax benefits, brings shame upon itself."
In 2010 and 2011, GALP received €34 million in the Madeira Free Zone, while in 2015 and 2016 it received €32.8 million due to tax exemptions in the Tax on Petroleum Products."
Saipem SGPS received tax credits of €43 million in 2012, €24 million in 2013, €53 million in 2014, €43 million in 2015 and €32.5 million in 2016.
Between 2012 and 2014, Galp's tax benefits in Portugal were lower as it moved its head office to the Netherlands – for tax reasons.
Saipem12000 drilling ship - floating on a sea of Portuguese tax credits