The Joint Committee on Communications, Natural Resources and Agriculture, in a report launched yesterday (May 9th), recommends a new fiscal licencing regime and greater public consultation on offshore oil and gas exploration. The Joint Committee has held a number of meetings in recent months, in which the diverse voices of key stakeholders in Ireland as well as Norwegian perspectives on the issue were heard. In the report the Committee stresses that, given the risks of long-term reputational damage, existing agreements should be adhered to irrespective of changing circumstances. In order to maximise the potential of hydrocarbon exploration for Irish citizens, the Committee recommends that:
* The overall tax take should, in the case of future licences, be increased to a minimum of 40 per cent, with a sliding scale up to 80 per cent for very large commercial discoveries.
* A transparent system of public consultation be fostered, including a statutory commitment that qualifying local communities be compensated financially through infrastructural and social development.
* The Petroleum and Other Minerals Act 1960 be reviewed to ensure a transparent fiscal licencing system, underpinned by clear law.
* A forum be established, compromising third level institutions, oil and gas companies, trade unions, government nominees and environmental and community representatives and on-going contact be pursued with other countries, such as Norway and Portugal, to exchange ideas on best practice.
The Chairman of the Committee, Andrew Doyle TD, says: “Ireland’s offshore oil and gas exploration industry has operated with limited success over the last 40 years. In recent years the exploration developments off the West coast of Ireland have brought the workings of the industry to the forefront of the public mind. Recent news reports seem to indicate further possibilities for a viable oil discovery off the South coast. It is therefore an opportune time for our Committee to publish this report on an issue critical to Ireland’s future prosperity and sustainability.”
He continues: “The Committee’s key concern has been to strike the appropriate balance between maximising State revenue with incentivising offshore oil and gas exploration, unleashing the benefits for Irish people as a whole. Consequently, much of the recommendations in the report focus on providing a fair and equitable taxation regime for the petroleum industry.”
A copy of the report, which includes wide-ranging recommendations, is being sent to the Minister for Communications, Energy and Natural Resources.