PwC calls on State to do more to attract oil and gas exploration

PricewaterhouseCoopers (PwC) has called on the State to do more to attract international energy companies to explore for oil and gas off the Irish coast. The firm said the Government should should emulate the approach of the IDA when it comes to promoting the sector abroad.

The Department of Energy, however, rejects the suggestion and says the approach currently adopted by its scientists is the best way to tout for international investment in the Irish oil and gas industry.

“A further push by Government or State bodies to promote the industry abroad in the same fashion that the IDA does so successfully for traditional FDI business would be [an] enabler for success,” said Ronan MacNioclais, a PwC tax partner who is part of the firm’s energy team.

The department responded by saying it often works alongside the traditional State enterprise agencies, but that the “core message” it delivers to abroad relates to the actual prospects for drilling success.

“As such, that message is best delivered by exploration specialists. Not surprisingly, therefore, at conferences and events such as [one taking place in] London this week and forthcoming events such as Houston in April, all of the countries are represented by their petroleum ministry or national oil company,” the department said.

Review of tax and licensing
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Government is currently undertaking a review of the tax and licensing regime for the oil and gas industry, and has appointed the international consultancy Wood Mackenzie to advise on the process.

The firm is due to report in April, and a new framework will be decided upon by June, when a new licensing round will be launched.

Industry critics want the Government to raise the rate on exploration profits from its current level of 25 per cent. PwC said the review of the tax regime for exploration “could have a significant impact” on the industry’s future here.

“The fiscal terms won’t be a match-winner for Ireland but, if we get them wrong, they could end up costing us the match,” said Mr MacNioclais.