The current package of reliefs and benefits for exploration firms has come under fire for being too generous.
Now Minister for Energy, Communications and Natural Resources, Pat Rabbitte, is seeking consultants to carry out a report on the best options for a fiscal regime to support oil and gas exploration.
The tender states that he is seeking the expert advice “having regard to the fact that Ireland’s indigenous oil and gas resources belong to the people and to the policy goal of maximising the benefits to the State from exploration for an extraction of those resources”.
In a recent speech Minister Rabbitte said: “Certainty as to fiscal terms is a pre-requisite to attracting oil and gas exploration investment.”
“In the context of planning for the next licensing round, it would be my intention to bring my consideration of this matter to a conclusion before the end of this year. That would ensure that the next licensing round could be launched against a backdrop of regulatory certainty and encourage much needed new investment in exploration in our offshore”.
The tender points out that there have been four commercial natural gas discoveries since exploration began offshore Ireland in the early 1970s with no commercial discoveries of oil to date.
The study is to determine if changes to the current fiscal licensing regime should be made having regard to the level at which terms are set; the nature of the instruments used and the tax reliefs available.
The tender states: “In the context of general public and recent parliamentary debate regarding the current fiscal terms the Minister has announced that he is seeking further independent expert advice on the “fitness-for-purpose” of Ireland’s oil and gas exploration, development and production fiscal terms.”
The document states that the ‘fitness for purpose’ of Ireland’s current fiscal regime for oil and gas will have regard to the petroleum prospectivity of the Irish offshore and the comparative international experience.
The department has advised prospective applicants that “this report should draw clear conclusions supported by analysis and make recommendations....Where more than one alternative course of action is recommended the comparative advantages and disadvantages of such options shall be quantified.”
Closing date for applications is Oct 15.