Ireland’s Government has launched the 2015 Atlantic Margin Oil and Gas Exploration Licensing Round and a new offshore oil and gas production taxation regime, including an increase in the top tax rate.
The new round, which will close September 2015, will cover all of Ireland’s major Atlantic basins: Porcupine, Goban Spur, Slyne, Erris, Donegal and Rockall. The form of concession on offer will be a two year Licensing Option, which could be converted into a 15-year Frontier Exploration License, which comprises a first phase of three years, and three subsequent phases of four years each.
Image: The Eirik Raude semisubmersible was drilling for ExxonMobil offshore Ireland last year. Read more: Dunquin disappoints but Irish hunt continues
The new fiscal terms follows a review of the Irish oil and gas tax regime by analysts Wood Mackenzie. Recommendations by the firm were supported by Ireland’s Minister for Communications, Energy and Natural Resources, Pat Rabbitte.
The recommendations include that production tax should be charged on a field-by-field basis, with the maximum 55% rate varying according to the profitability of the field. The current Profit Resource Rent Tax is 40%. Producers also pay 25% corporation tax.
At the Our Ocean Wealth conference yesterday in Dublin Castle, Ireland’s Minister for Natural Resources Fergus O’Dowd said: “The conclusion of the fiscal terms review allied with the announcement of the detail of 2015 Round provides industry with the certainty necessary to invest in exploration offshore Ireland.”
For the 2015 Round the overall Atlantic Margin is divided into three regions. The maximum number of blocks that can be applied for in each region is as follows:
“The increase in the maximum number of blocks per application to ten in the Rockall Basin is intended to stimulate exploration in a relatively underexplored frontier area of our offshore,” said O’Dowd.
A number of initiatives were also announced, to encourage exploration, including:
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