Toddy O'Sullivan
Question:47 Mr. T. O'Sullivan asked the Minister for Energy if he will outline the reasons for recent changes in the terms of oil and gas exploration, and if he will make a statement on the matter.
Written Answers. - Oil/Gas Exploration.
In 1991, only one exploration well was drilled offshore Ireland; an all-time low. I am determined to reverse the trend of decline in oil and gas exploration and to stimulate exploration activity. I have now taken action on petroleum taxation; new licensing terms will be published shortly.
The taxation measures in the Finance Bill contain elements which should work towards attracting exploration investment into Ireland. Most notably, the Bill provides for Corporation Tax at a rate of 25 per cent — with no production-related levy or higher tax rate — to apply where production of oil or gas takes place under petroleum leases which are issued before certain specified dates. In order to bring about the early drilling of wells the manner in which the availability of this tax rate is structured is such that greatest benefit can accrue to those companies which commit to exploration effort sooner rather than later.
Taken together, the enactment of petroleum taxation legislation and publication of new licensing terms will, for the first time, equip Ireland with a complete regime of fiscal and non-fiscal measures applicable to hydrocarbons exploration, development and production. I believe that these necessary steps will place Ireland in a strong position once again in relation to offshore exploration.