I welcome the recent publication by the Joint Committee on Communications, Natural Resources and Agriculture of its report on offshore oil and gas exploration. The report is a detailed document running to almost 130 pages and makes a total of 11 recommendations. On initial consideration, I can see merit in a number of the recommendations and look forward to discussing the report in more detail in the weeks and months ahead.
In relation to taxation, the report recognises there is a balance to be struck between maximising revenue to the State and incentivising companies to invest in exploration in the Irish offshore. The report goes on to recommend that the rate of tax applying to petroleum production in Ireland should be increased to between 40% and 80%, depending on the profitability of the field. It seems that factors such as high oil prices and advances in exploration technology were key considerations influencing this recommendation. However, high oil prices will not make Ireland any more or less attractive as a location for investment, compared to other countries with oil and gas potential.
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 from the current level of one to two exploration wells per year. While I look forward to debating all of the recommendations in the report in more detail, I remain to be convinced how doubling the maximum tax rate will help attract much need exploration investment to Ireland.
Question 409 answered with Question No. 402.
