ONE of the Irish oil industry's most high-profile executives has warned the Government it risks losing any investment in the sector in Ireland if it tightens the tax regime for exploration here.
Tullow Oil boss Aidan Heavey said imposing more taxes on firms looking for oil here will scare off companies thinking about investing in Ireland.
Earlier this week energy minister Pat Rabbitte said he would review how the State taxes oil and gas firms. While the oil industry maintains that the tax structure should not be toughened up, lobby groups have warned that the country is giving away its oil wealth.
Mr Heavey believes the riskiness of drilling around Ireland outweighs any suggestion that the country should impose higher taxes.
"It is a competitive market for oil and gas; countries all over the world are trying to get explorers in. There's been a lot of talk about how the State should use the same regime that Norway does, but that doesn't explain the Norway terms.
"People don't understand what the Norway terms are, if you spend money on exploration there it's the cheapest place in the world.
"If you spend $100m (€77m) on drilling and don't find anything, the Norwegian state gives you a rebate of $78m. They only hit you with tax if you are able to bring your oil to market," he added. There has been huge interest in the possibility of successful oil exploration around Ireland, especially since Providence Resources found more than one billion barrels of the stuff off Cork, but Mr Heavey made clear the jury was still out on Ireland as a destination for explorers.
"Until we see the really big, deep water reserves of the kind that attract the supermajors, we'll have to wait and see. There is oil here, but it hasn't come to market yet," he added.