Labour calls for review of the current licensing regime for oil and natural gas production

Friday August 12, 2005 16:40

by elaine - labour

Broughan critical of changes to the regulation of oil and gas exploration which were imposed by Ray Burke in 1988, by Bertie Ahern and Bobby Molloy in 1992.

FULL REVIEW OF IRISH OIL & GAS REGIME NECESSARY

Labour Energy Spokesperson Deputy Tommy Broughan has called for a comprehensive review of the current licensing regime for oil and natural gas production in Ireland.

Deputy Broughan said, ”Although the focus at present has rightly been on the dispute over the Corrib gas pipeline and the ongoing incarceration of the five rossport residents, the wider issues of the management of Ireland’s natural resources and the financial return to the Irish state for such assets needs to be urgently examined.

“The current measures in place in Ireland for licensing oil and gas exploration are some of the most advantageous to international oil companies in the EU and across the world. The corresponding return to Irish citizens for what is a critical national resource is extraordinarily low in comparison to other states.

“In 1975 my great predecessor and then Minister for Industry and Commerce, Justin Keating, established a comprehensive strategy for regulating oil and gas exploration in Ireland that corresponded to best international practice. This included a 50% state shareholding in any discovery plus royalties of 6% to 7%. However, the changes imposed by Ray Burke as Energy Minister in 1988 and in 1992 by then Minister for Finance, Bertie Ahern, and Energy Minister Bobby Molloy resulted in the present inadequate system.

“At present the Irish government has no stake in any such developments (unlike the Norwegian and Danish states), earns no royalties from the process and has a very low oil tax regime.

“Many other states have successfully changed the terms of their exploration licences and fiscal regimes, and as circumstances change, periodically review the measures in place. The UK’s North Sea fiscal regime was changed in the 2002 British budget to increase the return to the British state on oil and gas exploration and extraction.

“When the Dail resumes in the Autumn I will be pressing for a similar review of the management of Ireland’s oil and gas natural resources and the Labour Party will propose any necessary legislation.”