Dáil Éireann Debate, Tuesday - 22 January 2013
426. Deputy Seán Kyne asked the Minister for Communications, Energy and Natural Resources the financial amount which accrued to the State in 2012 from the royalties associated with the exploration and development of natural energy sources such as oil and gas in Irish territorial waters. [3044/13]
View answer427. Deputy Seán Kyne asked the Minister for Communications, Energy and Natural Resources the way the royalties which accrue to the State from the operation of energy exploration licences are calculated; when this system was established; and his plans to review same. [3045/13]
View answer428. Deputy Seán Kyne asked the Minister for Communications, Energy and Natural Resources the financial amounts, in monetary amount and also as a percentage of the overall revenue generated from the exploration fields, that accrued to the State in each year of the past 20 years from royalties earned from the licences granted to develop offshore energy sources in Irish territorial waters. [3046/13]
View answerI propose to take Question Nos. 426 to 428, inclusive, together.
There have been only four commercial petroleum discoveries since exploration began offshore Ireland in the early 1970s. The producing Kinsale, Ballycotton and Seven Heads (Kinsale area) gas fields off the coast of Cork and the Corrib gas field off the coast of Mayo. The three Kinsale area gas fields are nearing depletion and currently supply approximately 5% of Ireland’s gas requirements. The Corrib gas field is under development and first gas is not anticipated before end 2014. There have been no commercial discoveries of oil to date.
In terms of the direct financial contribution to the State from petroleum production, profits from the three 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. The combination of tax, royalties and rental fees currently provides for a State take of 40% of net income from these two fields .
Royalties are not payable on production from the Seven Heads Gas field and will not apply to future production from the Corrib gas field as Ireland, following the lead of countries such as the UK and Norway, moved away from a royalty based payments system to a tax based system in 1987. Profits from the Corrib gas field will be taxed at 25% when the field goes into production.
While the amount paid in tax is a matter between the companies concerned and the Revenue Commissioners, I can advise that the amount received in royalties from the Kinsale and Ballycotton gas fields over the past 20 years amounted to just over €136 million. Full details are set out in the table.
Royalty Payments for the period 1st January 1993 to 31 December 2012
|
Year |
Royalty Rate (% fair market value at well head) |
Amount |
|
1993 |
12.5% |
8,427,933 |
|
1994 |
12.5% |
9,228,211 |
|
1995 |
12.5% |
9,857,932 |
|
1996 |
12.5% |
9,917,763 |
|
1997 |
12.5% |
8,995,462 |
|
1998 |
12.5% |
6,702,681 |
|
1999 |
12.5% |
4,462,859 |
|
2000 |
12.5% |
8,824,311 |
|
2001 |
12.5% |
8,179,950 |
|
2002 |
12.5% |
7,306,393 |
|
2003 |
12.5% |
5,071,493 |
|
2004 |
12.5% |
4,899,606 |
|
2005 |
12.5% |
5,080,241 |
|
2006 |
12.5% |
12,230,641 |
|
2007 |
12.5% |
6,247,633 |
|
2008 |
12.5% |
8,153,045 |
|
2009 |
12.5% |
2,114,020 |
|
2010 |
12.5% |
2,571,624 |
|
2011 |
12.5% |
3,904,321 |
|
2012 |
12.5% |
3,955,353 |
|
Total |
136,131,472 |
