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NEW GUIDELINES FOR oil and gas exploration off Ireland are hoped to attract more industry to the sector.
It will also see an increase in the State’s share of any profits from extraction, but falls short of what was recommended by an Oireachtas committee and has been described as “cosmetic”.
New fiscal terms were drawn up following a report by Wood Mackenzie into Ireland’s current regulations for the sector.
Minister for Natural Resources Pat Rabbitte said these will ”engender industry confidence in the stability and predictability of Ireland’s oil and gas fiscal terms”.
The 25% corporation tax rate that currently applies to petroleum production will remain unchanged.
A new set of revised Profit Resource Rent Tax (PRRT) rates will see the government take 15% more revenue, in the case of the most profitable fields.
“Royalty payments”
The maximum rate will be increased to 55% from 40%, with a system of “royalty” payments also introduced.
The new terms are not retrospective, and existing oil and gas fields will continue paying the lower rates.
The industry has so far reacted positively to the new measures, with the Irish Offshore Operators’ Association (IOOA) saying it will help Ireland develop a “competitive edge”.
“The success of exploration in the Irish offshore – which is currently in an embryonic state – is dependent on a fair, attractive, transparent and robust fiscal regime to encourage drilling and hopefully field development,” Professor Pat Shannon, chairman of the IOOA, said.
Attractive to industry?
He added that although the terms are less favourable than what is currently in place, “it should still attract industry”.
However, Sinn Féin’s Spokesperson on Natural Resources Michael Colreavy has highlighted that an Oireachtas committee recommended a top rate of PRRT of 80%, and that the terms “fall short of what is needed”.
Shell to Sea spokesperson Terence Conway criticised that Wood Mackenzie was chosen to carry out the expert report.
“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,” Conway said.
“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.”
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These people must not have seen AIB’s latest advertising campaign – theme “brave”, as it getting up early, sticking to the task and running your business. It appears AIB have become a river of lending to hard pressed sme’s and the farming community. A most disgraceful and dishonest ad campaign in my opinion.
All of the adds for banks are dishonest. They are all giving mortgages and loans to SMEs but in reality this is a charade. You only have to talk to solicitors who will tell you that clients are being turned down for mortgages for the flimsiest of excuses. The current advertising campaigns are to give the impression that everything is back to normal.
Makes you feel good that we bailed the banks out,doesn’t it!
” Brave ” how are you! You would need to be brave…and foolhardy….If you thought approaching the back might make a difference to your struggling. The economy continues to limp along for all those brave hearts at the bottom of the pile while those with large cash deposits get bigger and richer. Only a fool would believe the spin the government espouse. There is no recovery, there is no trickle down, there are still empty shop units all over the country. And it’s too late for lending, what’s needed are grants, vat and tax breaks, lower rates and a commitment to changing the upwards only rent reviews.
I am so glad someone else made reference to that ad! It’s awful condescending Shi*e. the absolute cheek of AIB to put out an ad like that. The voice over is an appalling choice. Completely out of touch with reality.
This is the sort of evidence out there that shows where our economy is truly at and not the crap that is spun by FG & Labour. You can’t tax the crap out of people to pay debt, run a high spend economy and expect growth.
If Morgan Kelly’s recent prediction is correct, the outstanding loans to small business, if called in by the banks, is the biggest threat to the economy.
The gov have been choosing public sector and bondholders over private sector. Every tax hike means a loss of business to a restaurant and most small service businesses out there. Then you have Nama forcing zombie businesses to compete with ligit ones. And if you have survived all that the local council will be gouging the business in return for very little. The Irish Economy seems to be using Atlas Shrugged as a strategic plan.
This is the sort of evidence out there that shows where our economy is truly at and not the crap that is spun by FG & Labour. You can’t tax the crap out of people to pay debt, run a high spend economy and expect growth.
What happened to businesses maintaining proper current ratios and acid test ratios to ensure their short term expenses are covered? The SME sector insisted on maxing out every line of credit they could possibly set their eyes on..and more.
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