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Dáil Éireann debate -
Tuesday, 17 Oct 2000

Vol. 524 No. 2

Written Answers. - Offshore Exploration.

Paul Connaughton

Question:

125 Mr. Connaughton asked the Minister for the Marine and Natural Resources the incentives available for oil, gas and mineral exploration; the level of funding available under the National Development Plan, 2000-06; the potential areas for private investment; the level at which he expects such investment; and if he will make a statement on the matter. [22079/00]

Because of the lively international interest in exploring for non-petroleum minerals in Ireland it is not necessary to provide incentives for this activity. Instead we ensure that our regime remains attractive and widely known on an internationally competitive basis. We market the prospectivity of Ireland through licensing rounds at three monthly intervals, provision of data from previous exploration, participation in relevant trade shows and conferences and direct contact with target companies not at present exploring in Ireland so as to stimulate their interest.

This effort is enhanced and supported by a range of leaflets giving details on specific aspects of interest to potential explorationists and investors. These are updated regularly to take account of changing circumstances here and in the investment market. My Department is currently involved in an extensive study of comparative royalty and tax regimes in other mining jurisdictions, the results of which will allow me to fine tune our system so that it remains competitive. I expect to have these results early in the new year. My overall aim is to maximise the level of private investment in exploration, which is at its highest for many years, against a background of a significant global reduction in exploration expenditure.

Commercial production of oil and gas can make a major contribution to Ireland's economic development. This has been demonstrated by the impact of natural gas from the Kinsale Head and Ballycotton fields. The Government is, therefore, committed to realising the full potential of oil and gas resources in offshore Ireland. However, since the Government does not consider that direct State involvement in this area of activity is appropriate, the pursuit of its policy objectives requires that competent private sector companies be encouraged to invest in the search for and production of oil and gas in Irish waters. The private sector is recognised as having the resources, expertise and practical experience essential for such a task.

A primary incentive to investment in exploration and production offshore Ireland is the Government's fiscal treatment of such activity. A statutory regime of petroleum taxation together with attractive licensing terms were introduced in 1992. Royalties and production-related levies no longer apply. The detailed provisions of the taxation legislation recognise the operational characteristics of the sector while the regime as a whole achieves a risk-reward balance which reflects Ireland's present prospectivity circumstances and conditions and acknowledges the realities of competition for internationally mobile exploration or production investment.
There are no resources provided under the National Development Plan, 2000-2006 for either hydrocarbon or mineral exploration. All investment in these areas is funded by the private sector.
The overall level of investment is market driven and dependent on a wide range of factors. There is no reliable basis on which to develop firm forecasts of investment for the medium term.
Question No. 126 taken with Question No. 98.
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