The Government has said it will review its current tax terms for exploration companies in light of its decision to only award gas exploration licences in future and to ban the search for oil in Irish waters.
In a detailed update on its offshore exploration policies, the Government reiterated that no future oil exploration licences will be awarded — although existing oil licences can still be progressed.
It said that natural gas “must play a core part of our energy mix for some time to come” and will continue to for decades until renewable energy sources “are sufficiently developed to meet Ireland’s energy needs”.
The current fiscal terms surrounding Irish exploration means that explorers pay between 25% and 55% on profits made from an oil find as well as 5% of gross revenues per year for the lifetime of a commercial field.
The Government said the current terms will continue to operate “but will be reviewed at the time of any future [gas] licensing round”.
It said that if oil is discovered at future gas exploration projects, the minister will not authorise an oil find for production.
Industry representative group the Irish Offshore Operators’ Association welcomed the policy update, but said an important part of restoring confidence in the sector “will be for the Government to commit to firm timelines for regulatory changes needed to deliver the commitments laid out in the paper”.
Despite the ban on oil drilling, a recent survey found that the majority of Irish-focused exploration firms are planning to invest in their operations in Irish waters.