Details of next exploration licences due early in 2014

Speaking on the sidelines of the opening session of the two-day Ireland Oil & Gas summit in Dublin yesterday, Fergus O’Dowd, the natural resources minister, said while no decision had been made on the timeframe of the next licensing round or what area of the coast it will involve, more clarity should be available during the first three months of 2014.

Protest outside the Oil & Gas summit
 

The last licensing round undertaken was the Atlantic Margin Round in 2011, when 13 licence options were awarded. To date, eight of these have been converted to full exploration/ drilling licences, with that figure expected to increase to 11 by the end of next month.

Mr O’Dowd noted that while 2013 has seen the building of “real momentum” in oil and gas exploration offshore, a number of key issues need clarification before the Government embarks on its next licensing offer round.

Among these are a definitive decision on a tax regime relating to profits from commercial oil finds off the coast and final results from the ongoing €20m 2D seismic survey measuring the true potential of waters off the west coast.

Regarding the tax take, the Government is seeking independent advice and could come to a conclusion in the coming weeks.

The Government currently stands to receive between 25% and 40% of profits from any commercial field in Irish waters.

Some have called for an adoption of the Norwegian model, which takes nearly 80% of profits, but also repays a similar percentage of drilling costs if a well is found to be dry. It is suspected that the current Irish tax model will remain in place.

Mr O’Dowd said: “Ireland doesn’t have proven resources equivalent to those of major oil producing countries, such as Norway or the UK, and, as a consequence, Ireland’s tax terms for oil and gas production are deliberately aimed at attracting new investment, and are set at a level comparable to countries such as France, Portugal, and Spain, with more limited petroleum production and more limited proven resources.”