asked the Minister for Energy the price and tax terms expected to apply to any proven new gas reserves discovered by Marathon.
Ceisteanna—Questions. Oral Answers. - New Gas Reserves.
5.
The tax terms applying to any new commercial developments by Marathon are provided for in the existing agreements which are subject to Irish taxation laws. Corporation tax on profits will therefore apply. The agreements also provide for a 12½ per cent royalty on the value of gas production at the wellhead, less allowances for costs involved in delivering the gas to the point of sale. Details of the price to be paid to Marathon for gas are the subject of confidential commercial contracts the terms of which I am not at liberty to disclose.
Have the terms of those contracts been agreed?
Yes.
Will the general outline of prices be on a formula similar to the prices that are obtainable for Kinsale Head gas?
In the press statement which followed the revised terms, it was indicated that the price for the gas was slightly enhanced and that that would be the position in the new agreement.
When the Minister says "slightly enhanced" can I take it that it will not be a margin of more than 50 per cent?
The Deputy can be assured that commercial arrangements entered into between my Department and Marathon are based on the soundest type of arrangement possible given the circumstances of the time.
When the Minister says it will be slightly higher, can he put some margin on what he means by "slightly higher". Is it less than 50 per cent?
I associate a fair degree of business acumen with the Bruton family and the Deputy would not expect me in a situation where perhaps I could be negotiating with another company exploring the same seas and having a discovery, to publicly debate an arrangement which I had entered into with a previous successful company. That would tie my hands and, in the national interest, the Deputy would not wish me to do that.