Jerry Cowley (Mayo, Independent)
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Question 215: To ask the Minister for Communications, Marine and Natural Resources if his attention has been drawn to the fact that the Nigerian Government are in receipt of 60 per cent of the value of oil from the country and that a company (details supplied) are in receipt of 40 per cent of the value of the oil and the situation here where the Government get zero per cent needs review and overhaul; and if he will make a statement on the matter. [30178/06]

Noel Dempsey (Meath, Fianna Fail)
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The fiscal terms for the licensing regime under which offshore exploration companies operate are provided for by the Finance Act 1992. The system is straightforward and is based on a corporation tax rate of 25% applying to profits earned. Historic capital expenditures are 100% deductible at the start of production. No royalty or production bonus or their equivalents are required.

The regime was introduced with a view to establishing a risk/reward balance, which reflects Ireland's circumstances, including the industry perception of relative prospectivity, and acknowledges the realities of competition for internationally mobile exploration/production investment. I recently put in motion a review of the licensing regime under which offshore exploration companies operate in this country.

My Department recently engaged the advice of external experts to independently validate the proposed changes. When I have received and considered the report of the external experts I will bring forward proposals in relation to the licensing regime for exploration and production.

I should point out to the Deputy that Nigeria is one of the biggest oil producers in the world, and a substantial gas producer, and is a proven petroleum province. Ireland, on the other hand, does not currently produce any oil and only produces approximately 15% of its gas requirements.