Government seeking to strike balance between attracting investment and maximising returns from natural resources to the State.The Minister for Communications, Energy and Natural Resources Pat Rabbitte T.D., today announced that his Department has, following a public procurement process, selected international oil and gas experts Wood Mackenzie to advise on the “fitness-for-purpose” of Ireland’s current oil and gas fiscal terms.
Minister Rabbitte stated “Ireland’s offshore whilst holding great promise is relatively underexplored with only four commercial gas finds and no commercial oil finds to date. The last commercial discovery was almost two decades ago with the discovery of the Corrib Field.
“2012 saw one well drilled and three fields producing 0.4 billion cubic metres of gas and no oil in the Irish Offshore. By comparison in the Norwegian Offshore 172 wells were drilled, and seventy seven fields produced 114.8 billion cubic metres of gas and 694 million barrels of oil.
“In setting our fiscal terms we need to strike the necessary balance between attracting the high-risk exploration investment needed to prove that promise whilst maximising the return to the State and its citizens from our natural resources.
“Wood Mackenzie will bring its highly respected fiscal consulting experience to bear on this issue. They have been asked to focus their advice on what level of fiscal gain is achievable for the State and its citizens and the best way to achieve such gain”.
Minister of State at the Department of Communications, Energy and Natural Resources Fergus O’Dowd T.D said that the Government needed to be competitive on the open market to attract investment in exploration.
“The Government’s strategy for the exploitation of the State’s natural oil and gas resources aims to maximise the level of exploration activity and increase the level of production activity, while ensuring a fair return to the people” said Minister O’Dowd.
“Given increasing international interest in the Irish offshore it is timely that the ‘fitness-for-purpose’ of the existing fiscal terms be reviewed. This will ensure regulatory certainty in advance of the launch of the next oil and gas exploration licensing round expected in June this year.”
ENDS
Note for Editors
The terms of reference set out in the Request for Tenders
“Having regard to the fact that Ireland’s indigenous oil and gas resources belong to the people and to the policy goal of maximising the benefits to the State from exploration for and extraction of those resources, the Minister for Communications, Energy and Natural Resources is seeking expert advice as to:
(i) The “fitness for purpose” of Ireland’s current fiscal regime for oil and gas exploration, development and production having regard to:
The petroleum prospectivity of the Irish offshore
Ireland’s relative attractiveness as a location for mobile international exploration investment
The findings of the May 2012 report of the former Joint Oireachtas Committee on Communications, Natural Resources and Agriculture, together with the debate of that report by Dáil Éireann
Issues raised through the wider public debate on the fitness for purpose of Ireland’s fiscal regime
Comparative international experience
Other relevant reports
(ii) Supported by analysis, whether revisions should be made to the fiscal licensing regime, in particular having regard to:
The level at which the terms are set
The nature of the instruments used
The tax reliefs available, including both the nature and timing of tax reliefs”
About Wood Mackenzie
Wood Mackenzie is a UK based global leader in commercial intelligence for the energy, metals and mining industries. It provides objective analysis and advice on assets, companies and markets, giving clients the insights they need to make better strategic decisions.
It has provided forward-looking insight for over 40 years; and its robust proprietary data and models enable it to forecast and value with confidence and provide clients with strategic advice based on knowledge.
Its experienced sector teams are located around the world. It offers a combination of global understanding with detailed regional knowledge. www.woodmac.com