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The Irish Mirror: STRIKE IT RICH

Published: Aug 02, 2007

IRELAND could be on the verge of a multi-billion euro bonanza after the Government invited companies to explore for oil and gas in the Atlantic.

But energy firms who take up the offer will have to pay dearly when they discover oil and gas fields off the West Coast.

Natural Resources minister Eamon Ryan said yesterday new exploration and production licences will see hiked taxes of up to 40 per cent on profits from newly-discovered reserves.

He added: “The basis for this decision was to ensure a greater return from our own natural resources, while maintaining the incentive for companies to explore our shores.

“I believe these changes achieve this balance.”

The Irish Daily Mirror has campaigned for people to get their fair share of gas and oil wealth after we revealed the country was getting no royalties from oil companies.

Unlike the UK and Norway, this country has allowed multi-nationals to sell off Irish gas and without paying a cent in royalties.

Recent demonstrations over Shell’s controversial onshore gas pipeline in Co Mayo have caused further resentment as the company will not have to pay for the gas they pump out.

Under the new system, energy companies will have to pay additional levies on a graded basis, up to 15 per cent of profits, depending on the size of the find and on top of the existing corporation tax.

The system which applies immediately for all licences issued from January 1 will bring Ireland into line with the UK, Denmark, Norway and Germany.

Mr Ryan believes the potential of the under-explored Atlantic in a world approaching peak oil production will make it hugely attractive for prospectors.

He said: “The data available to us now and seismic technology necessary for prospecting have vastly improved in the intervening 15 years.

“Energy prices continue to rise. Both of these factors are leading to greater profits in the industry.

“Fewer prospective areas are open for exploration internationally, making Ireland’s unexplored basins even more attractive.”

He added analysis estimated there were around 10 billion barrels of oil in the Atlantic.

Invitations for the new round of licensing for exploration in the Porcupine Basin will be published in the EU Official Journal next month.

Mr Ryan said he would also be reducing the overall length of certain licences, requiring licensees to surrender acreage earlier.

All fees would also increase in line with the consumer price index and the confidentiality period of licensee data given to the Government would be reduced.

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