"This is one of the most important stories of it's kind in Europe."
The Joint Committee on Communications, Natural Resources and Agriculture of the Irish parliament has recommended a new fiscal licensing regime and greater public consultation on offshore oil and gas exploration in a new report.
After having held several meetings with Irish stakeholders over the past few months, the Committee has proposed that the overall tax take should, in the case of future licences, be increased to a minimum of 40%, with a sliding scale up to 80% for very large commercial discoveries. The report also recommends that the Petroleum and Other Minerals Act 1960 be reviewed to ensure "a transparent fiscal licensing system, underpinned by clear law".
However, the Committee stresses in the report that existing petroleum extraction agreements should be honoured "given the risks of long-term reputational damage" to the Irish investment environment.
Chairman of the Committee, Andrew Doyle, said:
“Ireland’s offshore oil and gas exploration industry has operated with limited success over the last 40 years. In recent years the exploration developments off the West coast of Ireland have brought the workings of the industry to the forefront of the public mind. Recent news reports seem to indicate further possibilities for a viable oil discovery off the South coast. It is therefore an opportune time for our Committee to publish this report on an issue critical to Ireland’s future prosperity and sustainability."
"The Committee’s key concern has been to strike the appropriate balance between maximizing State revenue with incentivizing offshore oil and gas exploration, unleashing the benefits for Irish people as a whole. Consequently, much of the recommendations in the report focus on providing a fair and equitable taxation regime for the petroleum industry."
"We also recommend much greater consultation with local communities and contact with other countries such as Norway and Portugal, to ensure the future exploration opportunities are developed in line with international best practice."