Tuesday, 11 March 2014

Ceisteanna (38)

Michael Moynihan


38. Deputy Michael Moynihan asked the Minister for Communications, Energy and Natural Resources if the tenders process for the provision of expert advice on Ireland's oil and gas exploration development and production fiscal terms has been completed; the amount of oil and gas that was produced here in 2013; the amount of revenue received by the State from this production and exploration; and if he will make a statement on the matter. [10963/14]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Communications)

Following a public procurement process, my Department has selected international oil and gas experts Wood Mackenzie to advise on the “fitness-for-purpose” of Ireland’s current oil and gas fiscal terms. In 2013 there was no commercial production of oil in the Irish offshore, however the total gross production from gas fields, namely the Kinsale, Ballycotton and Seven Heads fields off the coast of Cork, was 6.95 billion cubic feet. The revenue generated for the State from the production from these gas fields is received in the form of rental fees, royalty payments (with the exception of the Seven Heads Gas field) and corporation tax.

Profits from the three gas fields are taxed at a corporation 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 as Ireland moved away from a royalty based payments system to a tax based system in 1987.

The rental fees figure for 2013 for three gas fields totalled €768,466. The royalties figure attributable to production in 2013 from the two gas fields will not be finalised until later this year. The amount paid in tax in respect of the three gas fields is a matter between the companies concerned and the Revenue Commissioners.