Dáil Éireann Debate, Tuesday - 18 September 2012
999. Deputy Pearse Doherty asked the Minister for Communications; Energy and Natural Resources the individual gas or oil extraction projects currently being undertaken in Irish territories; the licence arrangements in place for these projects; and the total projected return to the State from these projects via dividends, licence payments or other fees. [39199/12]
Amharc ar fhreagraThere 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 Kinsale area gas fields are now nearing depletion and currently provide approximately 5% of Ireland’s annual gas requirements. The Corrib gas field is under development and first gas is not anticipated before late 2014. All four gas fields are held under petroleum leases issued by my Department.
In terms of the direct financial contribution to the State, profits from the three Kinsale area gas fields are taxed at a rate of 25%. In addition royalties from the Kinsale and Ballycotton gas 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 or from future production from the Corrib gas field as Ireland 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 since production commenced is €193.8 million.
The rate of tax that will apply to any future commercial discoveries made under an exploration licence granted since January 2007 will be between 25% and 40% depending on the profitability of the field.
