Ireland Increases Offshore Exploration Tax

The Irish Government will increase taxes on offshore oil and gas exploration with immediate effect.

Under current arrangements the industry pays a standard 25%corporate tax.

The reforms, announced today, include a profit resource rent tax where additional taxes of up to 40% will be placed on oil and gas revenues depending on profits and the accumulated level of capital investment.

Minister for Communications, Energy and Natural Resources Eamon Ryan says the taxes bring Ireland into line with comparable countries.

"Ireland’s oil and gas is a resource of the people," Ryan says.

"The Government acts as caretakers / owners of these resources on their behalf. It has a duty to ensure appropriate return and to ensure that they are adequately and properly explored."

Other changes to industry regulation include reducing the overall length of certain licences, increasing all fees in line with the Consumer Price Index and reducing the confidentiality period relating to data acquired by licensees and furnished to the department.

Ireland is expected to grant a number of exploration licenses in the Porcupine Basin, an area spanning 63,500km off the south-west coast in the autumn.

By Elizabeth Clifford-Marsh