"This is one of the most important stories of it's kind in Europe."
But experts say State may not get a cent
Drillers could pocket €53billion from a new find of 1.6billion barrels of oil off the coast of Cork - but the Irish taxpayer may have to wait years to even see a cent of it.
Yesterday, politicians and economists called for an overhaul of current policy - which means Ireland has no stake in its natural resources and can only hope to regain a fraction of its worth via taxation.
The international tax average is 68 per cent, but Ireland's tax term means we could only net between 25 per cent and 40 per cent of the value of the oil bonanza, which at current crude oil prices would be worth between €13billion and €21billion.
Experts warn that exploration companies need only pay tax once they show an operating property, and that they can first write off all their costs of exploration in Irish waters and of developing the oil field.
A cross party Oireachtas committee has recently proposed raising the tax take from large oil and gas finds up to 80 per cent of profits, which would se the Barryroe oil field contribute €42.4billion to the Irish economy.
Tony O'Reilly Jr, of Irish oil and gas exploration company Providence Resources, has described the Ballyroe oil as high quality 'sweet, light crude' which he likened to a 'full-bodied claret'. Oil was first discovered in the area in the Seventies, but it has taken new technology and the incentive of sky-high oil prices to make it a commercial project.
And Providence tol the Stock Exchange yesterday that its find had proved to be four times bigger than anticipated. The oil 'in place' amounts to between one billion and 1.6 billion barrels, and the company said it will be possible to recover 38 per cent of this. While it's good news for Providence, it's less so for the Irish taxpayer. Economist Colm Rapple said 'It will certainly be years, maybe never, before we make any tax on this... It could be years down the line before it makes a taxable profit'. He warned that there was also no requirement in the drilling licences for oil found off the Irish coast to be landed here – it could be taken by tanker elsewhere to be refined, meaning jobs would not be created here.
In a misguided bid to stimulate exploration, successive ministers in the late Eighties and Nineties reduced the State's share in all offshore oil and gas from 50 per cent to zero, and abolished to the State, can write off 100 per cent of their costs against tax at 25 per cent.
Shell to Sea has dubbed it 'the great oil and gas giveaway'.
The Corrib gas project in Co. Mayo raised anger, not only due to health and safety concerns but because it was felt Ireland had sold out its natural resources.
Opposition parties including Sinn Féin and the Socialist Party say a publicly-owned exploration and recovery company should be established to prevent Ireland's natural resources being harvested by private interests with little benefit to the Irish people.
Sinn Féin spokesman on energy Martin Ferris TD said: 'Although the extent of the Cork find comes as welcome news, the stark reality is that under current terms, it will bring little benefit to the country'.
However, last night Marine Minister Simon Coveney insisted that the Government has new safeguards in place to ensure Ireland recieves a fair share of profits from the find in Cork.
'Next Tuesday we will be launching a document called Harnessing Our Ocean Wealth' he said.
'It's been in preparation for nearly 14 months by the marine co-ordination group in Government, I chair it. And part of that document will be about natural resources. I think as a country we need to learn some of the lessons of the Corrib fiasco. Ireland should be benefiting right now from gas coming in off the west coast. We learnt some very painful lessons during the whole process.'
Providence said it plans to invest upwards of €400 million in the Cork project. Technical director John O'Sullivan said it was hoped the first oil would be landed in 2015 or 2016, and said the Cork refinery would be the obvious choice, if it could be upgraded.
'How we develop and maximise resource recovery – that has a big impact on what the Exchequer gets,' he said.
'It gets up to 40 per cent of the profit of what we extract.'
Minister for Communications, Energy and Natural Resources Pat Rabbitte said: 'It's good news, we never had an oil strike, it's important to put it in that context.' He said he had 'an open mind' regarding possible tax hikes for large oil and gas finds.