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Changes to Ireland’s licensing terms for oil and gas

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News Release – Issued by Shell to Sea

June 18th , 2014 – For immediate release

CHANGES TO OIL/GAS LICENSING TERMS ‘COSMETIC’

State continues to rely primarily on corporation tax to extract revenue

The changes to Ireland’s licensing terms for oil and gas announced by Pat Rabbitte today (18th June 2014) are cosmetic and will do little to address the State’s mismanagement of its valuable resources, according to Shell to Sea.[1]

Shell to Sea spokesperson Maura Harrington said: “These changes are cosmetic, Ireland will continue to rely almost exclusively on a tax on profits as a means of extracting revenue from the oil and gas it has given to private companies. We have seen recently how creative accounting has resulted in corporations such as Apple paying almost no tax on profits in Ireland .” [2,3]

Maura Harrington continued “The changes are not retrospective, so the best areas of Ireland’s territory for which licenses have already been given out will continue to be subject to the old terms .” 

Terence Conway stated “While the Government has been forced to respond to years of pressure from campaigners on this issue, the changes only give the illusion that the state will get a reasonable amount of revenue, while still only guaranteeing 5% of the value of the resources.” 

The Wood Mackenzie report admits “The changes we recommend should not alter the overall perception of Ireland as a ‘high risk / high reward’ country for exploration” and also states that Wood Mackenzie believes that the recommended system will greatly “improve the perception” of the fiscal terms .” [4]

Terence Conway continued “As could be expected from a company so closely linked with the oil industry, the Wood Mackenzie report still recommends continuing to give the oil companies control over and the vast majority of the profits, from whatever oil and gas is found. The State will still take no share in production, and will have no control over what happens to our oil and gas, e.g. whether it is landed in Ireland or supplied to the Irish market .” [5]———

NOTES TO EDITORS

[1] Text of Minister Pat Rabbitte’s speech announcing new terms:

[2] Apple confirms 2% tax rate for two Irish subsidiaries – RTE News

[3] Making a Killing: Oil Companies, Tax Avoidance and Subsidies – Platform London

[4] Review of Ireland ’ s Oil & Gas Fiscal System – Wood Mackenzie

[5] Inappropriate energy advisers selected on oil and gas terms – Shell to Sea

For verification and further comment contact:

Terence Conway: 086 0866264
Maura Harrington: 087 9591474

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RELATED

Oil and gas tax regime faces reform: Belfast Telegraph 18 June 2014

 

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