Enda Kenny (Mayo, Fine Gael)
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Question 184: To ask the Minister for Communications, Marine and Natural Resources the estimated value to the people and economy here of the proven potential of the Corrib field; and if he will make a statement on the matter. [39740/06]

Noel Dempsey (Meath, Fianna Fail)
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Production of Corrib Gas Field is a major infrastructural project, which has the potential to play a significant role in the economic and social regeneration of Mayo and the northwest region. It will facilitate the improvement of the region's infrastructure and increase local employment, in both the short and long term. The development will also increase Ireland's security of supply by providing a reliable, secure and indigenous source of gas.

Construction work on the Corrib project will contribute to Exchequer income from corporation, payroll and indirect taxation insofar as it relies on sourcing of Irish skills, staff and material. Operation of the field will similarly contribute to the Exchequer and will also yield lease rental income. In addition to sharing in general prosperity, communities in Mayo will benefit where there is local sourcing of workers, services and goods. The project will generate over 700 jobs in the construction phase of the Bellanaboy Gas Terminal. It is also anticipated that 50 to 60 staff in three shifts will be employed to operate the terminal.

I understand that the developers recently issued letters of intent to a number of Irish contractors for work on the site, valued in the region of €76 million.

I also welcome the recent decision by the Energy Regulator to extend the natural gas network to eleven towns along the route of its Mayo- Galway transmission pipeline. Athenry, Craughwell, Headford, and Tuam in Co. Galway and Ballina, Ballyhaunis, Castlebar, Claremorris, Crossmolina, Knock and Westport in Co. Mayo will all benefit from new gas connections. This has been made possible because of work undertaken by Bord Gáis in anticipation of landing gas from Corrib and introducing it into the gas transmission network.

Coming specifically to the actual revenue to be generated from the field, I should point out that the principal mechanism for extracting State revenue from offshore production under the current exploration terms is via a special higher rate of Corporation Profits Tax at 25%. My Department claims no particular expertise in taxation matters, which is the preserve of the Revenue Commissioners. However, taking current estimates of the recoverable reserves, applying the recent market price for gas and roughly estimating the cost of production over the life of the field would lead to a figure for direct Government revenue of the order of one and a half billion Euro. It will be appreciated that each of these parameters is subject to significant variation and that the timing and profile of production would also have an impact. This calculation is based on a historically very high gas price and the reality could be considerably lower. I am not in a position to estimate the indirect revenue referred to earlier, which is likely to be significant. I would also reiterate that the terms themselves are under review although the outcome of the review will not affect existing licences and leases.