Joan Burton (Dublin West, Labour)
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Question 819: To ask the Minister for Communications, Energy and Natural Resources the details on the search for oil off the coast of Dalkey, County Dublin; the terms of the licence agreement under which this search is being carried out; and if he will make a statement on the matter. [15536/10]

Conor Lenihan (Dublin South West, Fianna Fail)
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Licensing Option (No. 08/2) was granted to Providence Resources plc and Star Energy Oil and Gas Ltd over 959 square kilometres in the Kish Bank Basin for 3 years from 18 August 2008 to 17 August 2011. A Licensing Option gives the holder the first right, exercisable at any time during the period of the Option, to a Petroleum Exploration Licence over all or part of the area covered by the Option.

During the period of the Licensing Option, companies generally conduct preliminary research, assess seismic data etc., as by the end of the Option period companies must either apply for a Petroleum Exploration Licence or surrender the acreage. Any Petroleum Exploration Licence awarded over the area would be subject to a commitment by the licensee to drill an exploration well in the first three years of the licence. Should this proceed to a commercial discovery, it will be subject to the revised Licensing Terms for Offshore Oil and Gas Exploration, Development and Production 2007, which provides for a new profit resource rent tax in addition to the 25% corporate tax rate previously applying. These terms ensure that the return to the State will increase to a maximum of 40% in the case of the most profitable fields. The general rate of corporation tax is 12.5%.