Rabbitte to review tax policy on oil firms
ENERGY Minister Pat Rabbitte is to review how the Government taxes companies looking for oil in Ireland and Irish waters.
The move comes after a report from the former Joint Committee on Communications, Natural Resources and Agriculture recommended Ireland pursue a tax regime similar to Norway, where oil companies are heavily taxed at source by the state.
Mr Rabbite said he did not "see the logic" in that plan for Ireland given the lack of commercial success for explorers here, but instead promised to review the policy overall.
Any changes could hit Irish companies such as Providence Resources, Fastnet or Petrel, which are currently looking for oil and gas in Irish waters.
"While I have clearly indicated my reservations about Norwegian-style tax terms, I am conscious that long-term investment decisions on exploration expenditure would benefit from the maximum degree of certainty on the stability of the fiscal regime," Mr Rabbitte said.
"With that in mind and having regard to the fact that the last review of the fiscal terms was in 2007, it is my intention following the conclusion of this debate to seek further independent expert advice on the 'fitness-for-purpose' of Ireland's fiscal terms," he added.
Meanwhile, Petrel Resources says it is seeking a larger partner to help it fund drilling off the coast of Ireland and hopes to conclude a deal in the coming months.
Ireland's oil prospects have come to the fore after positive results last year at the Barryroe field in the Celtic Sea, which now looks set to be developed, turning the country into an oil producer.
Dublin-based Petrel, which has a stock market value of about €16m said yesterday it was in talks about bringing in a partner to help fund drilling off Ireland's coast, which, due to the deep water and expensive rigs, costs tens of millions of dollars.
"We've been approached by a few players that we're now in discussions with," said Petrel managing director David Horgan, adding he expected to conclude the discussions in coming months.