Dáil Éireann Debate, Wednesday - 16 January 2013
604. Deputy Dominic Hannigan asked the Minister for Communications, Energy and Natural Resources the current financial return to the Irish Exchequer from oil and gas exploration; the return in the years 2007, 2008, 2009, 2010 and 2011; the number of companies in each of those years that have contributed to that return and the names of same; and if he will make a statement on the matter. [1441/13]
View answerThere have been four commercial natural gas discoveries since exploration began offshore Ireland in the early 1970s, namely the Kinsale, Ballycotton and Seven Heads (Kinsale area) producing gas fields off the coast of Cork and the Corrib gas field off the coast of Mayo. There have been no commercial discoveries of oil to date. The three Kinsale area gas fields are nearing depletion and currently provide approximately 5% of Ireland’s annual gas requirements. The Corrib field gas is under development and first gas is not anticipated until early 2015.
In terms of the direct financial contribution to the State, profits from the Kinsale area gas fields are taxed at a rate of 25%. In addition royalties from the Kinsale and Ballycotton fields are payable to the State at a rate of 12.5% of the fair market value of the gas at the well head. While the amount paid in tax is a matter between the operators of the gas fields and the Revenue Commissioners, I can advise that the amount received in royalties since 2007 amounted to just under €27 million. Full details are set out in the table.
Royalties are not payable on production from the Seven Heads gas field as Ireland moved away from a royalty based payments system to a tax based system in 1987. Profits from future production from the Corrib gas field will be taxed at a rate of 25%. 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 already applying. The revised terms ensure that the return to the State would be up to 40% in the case of very profitable fields.
Details of all petroleum authorisations are contained in the quarterly acreage report published on the Department’s website www.dcenr.gov.ie and in the six-monthly report on petroleum licensing laid before each House of the Oireachtas.
Royalty Payments for the period 1 st January 2007 to 31 st December 2012
|
Year |
Company |
Royalties received |
|
2007 |
PSE Kinsale Energy Limited |
€6,247,633 |
|
2008 |
PSE Kinsale Energy Limited. |
€8,153,045 |
|
2009 |
PSE Kinsale Energy Limited |
€2,114,020 |
|
2010 |
PSE Kinsale Energy Limited. |
€2,571,624 |
|
2011 |
PSE Kinsale Energy Limited. |
€3,904,321 |
|
2012 |
PSE Kinsale Energy Limited. |
€3,955,353 |
|
Total |
€26,945,996 |
