THE COMMUNICATIONS AND Natural Resources Minister Pat Rabbitte has said that comparisons between Ireland’s oil prospects and those in Norway, which has an 80 per cent tax on oil profits, is like “comparing apple and oranges”.
Rabbitte said that while he would review Ireland’s lower tax rate on oil and gas profits, it was not reasonable to compare Ireland with Norway and said that the country could not afford to carry out its own offshore drilling.
He told RTÉ’s Morning Ireland: “It costs between €80 and €100 million a pop to drill a well off the Irish offshore.
“The Irish state doesn’t have that kind of money and therefore we are dependent on attracting the private industry to spend the money.”
The Minister said that exploration companies have already spent some €5 billion “for little enough return”.
Hopes that Ireland could begin a path of energy independence – it has one of the lowest in the EU – emerged last year after Providence Resources said that it found billions of barrels of oil off the Cork coast.
Last night the Dáil debated a 12-month-old report by an Oireachtas committee into offshore oil and gas exploration which recommended adjusting Ireland’s top corporate tax rate on offshore drilling profits from 25 per cent to as much as 80 per cent, as is the case in Norway.
But on RTÉ this morning, Rabbitte said: “I think it’s a pity that this canard about Norway has been flown and has captured some imagination.
“The truth of the matter is it is the unique geological advantage that Norway has where you can expect a [oil] strike in four as compared to three strikes here from 156 drilling, it is that level of prospectivity that means that you can have that level of tax.”
He said that comparisons to Norway were like “comparing apples with oranges” and said that people who were responsible for this comparison “should have recanted but didn’t”.
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