Written answers

Wednesday, 20 October 2010

Department of Communications, Energy and Natural Resources

Offshore Exploration

9:00 pm

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context

Question 238: To ask the Minister for Communications, Energy and Natural Resources the licensing arrangements that currently exist for oil, gas and mineral exploration; the way these compare with international norms; the tax treatment of companies involved in this activity; the reviews if any underway regarding licensing; and if he will make a statement on the matter. [38002/10]

Photo of Conor LenihanConor Lenihan (Dublin South West, Fianna Fail)
Link to this: Individually | In context

Exploration for oil and gas in Ireland, in common with most other jurisdictions, is carried out under licence. Petroleum exploration authorisations are issued by my Department under the Petroleum and Other Minerals Development Act 1960 and the operational framework is set out in the Licensing Terms for Offshore Oil and Gas Exploration, Development & Production 2007. Petroleum exploration investment is encouraged through active promotion of Ireland's petroleum potential and the holding of regular licensing rounds. The next licensing round, which covers all of Ireland's major Atlantic sedimentary basins with proven petroleum systems, will take place in the first half of next year.

A comprehensive review of Ireland's licensing terms was carried out in 2007 following which both the fiscal and non-fiscal licensing terms were revised. The revised terms apply to all exploration licences issued since 1st January 2007 and have been carefully balanced to attract those willing to invest in high-risk exploration while at the same time ensuring the State receives a fair share of profits where a commercial discovery is made. The revised terms provide for a new profit resource rent tax of up to 15% in addition to the 25% corporate tax rate previously applying, ensuring that the return to the State increases to 40% in the case of the most profitable fields.

Minerals exploration in Ireland may only be undertaken under the terms and conditions of a Prospecting Licence issued by my Department. Such licensing arrangements are not unusual in the developed world. Individuals involved in minerals exploration are doing so in the hope of discovering commercially viable deposits. In the event that such deposits are discovered a State Mining Facility lease or licence is required. Financial terms for State Mining Facilities are negotiated on a case by case basis. Mining profits are subject to corporation tax at a rate of 25%.

Comments

No comments

Log in or join to post a public comment.