Dáil Éireann Debate, Tuesday - 5 April 2011
37 Deputy Martin Ferris asked the Minister for Communications, Energy and Natural Resources his plans to revise the licensing and taxation terms governing oil and gas exploration to ensure a greater return to the Exchequer; and if he will make a statement on the matter. [6305/11]
View answerAs I outlined in my reply to Priority Questions Nos. 24 and 25 today, Ireland's petroleum potential is largely unproven and this is likely to remain the case until there is a significant increase in the level of exploration activity, particularly exploration drilling. Ireland competes with other countries to attract mobile international exploration investment. It is important that Ireland maintains a licensing regime that appropriately reflects both the risks and rewards of investing in petroleum exploration in the Irish offshore, relative to investing in exploration in other jurisdictions.
A comprehensive review of Ireland's licensing terms was carried out in 2007 by independent economic consultants, following which both the fiscal and non-fiscal licensing terms were revised. The revised terms apply to all exploration licences issued since 1 January 2007 and provide for a new profit resource rent tax of up to 15% in addition to the 25% corporate tax rate previously applying. The revised terms ensure that the return to the State would be up to 40% in the case of very profitable fields.
Ireland's petroleum taxation rate is deliberately pitched at a level that is consistent with countries such as France, Portugal and Spain, who like Ireland have limited petroleum production, rather than with major petroleum producers such as Norway or the UK.
