Liz McManus (Wicklow, Labour)
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Question 560: To ask the Minister for Communications, Energy and Natural Resources if petroleum leases granted before 1 January 2007, under the terms of his Department's licensing terms for offshore oil and gas exploration and development 1992, included or were accompanied by an assurance that no changes would be made over the commercial life of the lease to the tax treatment of income and gains arising by virtue of such leases and in particular that no royalties or production related levies would be imposed and the special rate of corporation tax would not be changed; and if he will make a statement on the matter. [39779/08]

Seán Power (Kildare South, Fianna Fail)
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A petroleum lease is a high level agreement between the Minister and the developer of a petroleum production project which sets out certain rights and obligations of the parties to the lease. Exploration is a high risk business and is carried out in the context of formal representations by the State as to the regulatory and taxation regime, which would apply in the event of such success.

Since 1992 only two petroleum leases have been agreed. These leases were agreed in respect of the Corrib Gas Field (2001) and the Seven Heads Gas Field (2002). These leases do not include provisions detailing the tax to be paid in respect of profits from either field. The relevant taxation provisions are detailed in the Finance Acts. Accordingly, the only provision in the two leases relating to taxation is a provision imposing an obligation on the lessees to pay all taxes properly due. There are no provisions regarding royalties in either lease as royalties were replaced in 1992 by a special Corporation Tax rate for petroleum production as a means of achieving a return to the State from petroleum production.

While the foregoing sets out the formal position, the issue of the reputation of a country in regard to stability of regulatory and taxation matters is a critical one in relation to mobile international investment generally and exploration investment in particular.