Terence Flanagan (Dublin North East, Fine Gael)
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Question 433: To ask the Minister for Communications, Energy and Natural Resources if he will re-negotiate the deal which involved the State selling off the rights to gas off the west coast; and if he will make a statement on the matter. [25019/09]

Eamon Ryan (Dublin South, Green Party)
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Where the Department enters into contracts relating to exploration for or production of oil and gas, it does not revoke such contracts unless there is a breach of the contract terms by the other party. The Department is actively engaged in promoting opportunities for exploration for oil and gas offshore Ireland with the aim of attracting an increased share of mobile international exploration investment to Ireland. It is only by growing the level of exploration activity that Ireland will be able to properly benefit from its indigenous natural resources of oil and gas.

Where a commercial discovery is made and is then brought to development, the principal financial return to the State will be through the tax system. Under the Finance Acts a special rate of corporation tax applies to profits from the production of oil and gas. Profits are liable to tax at a rate of between 25% and 40%.

The current tax regime was given effect to through the 2008 Finance Act. The changes made at that time resulted from a review of Ireland's licensing terms that was undertaken in 2007. The regulatory framework put in place post the 2007 review reflects the fact that Ireland's Atlantic Margin is relatively under-explored and also reflects the high cost and technical challenges associated with undertaking exploration in the area. Since 1970 some 128 wells have been drilled in Irish waters which, over the period have resulted in four commercial discoveries.