Irish Independent Friday 17 May 2013 Business 35

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Oil boss warns tax liil̂ es will scare off investors Heavey says jury out on Ireland as exploration destination Peter Flanagan

ONE of the Irish oil industry's most high-profile executives has warned the Govemment it risks losing any investment in the sector in Ireland if it tight­ens the tax regime for explo­ration here.

"Mlow Oil boss Aidan Heavey said imposing more taxes on firms looking for oil here will scare off companies thinking about investing in Ireland.

Earlier this week energy min­ister Pat Rabbitte said he would review how the State taxes oil and gas firms. While the oil industry maintains that the tax structure should not be tough­ened up, lobby groups have warned that the country is giv­ing away its oil wealth.

Mr Heavey believes the risk­iness of drilling around Ireland outweighs any suggestion that the country should impose higher taxes.

"It is a competitive market for oil and gas; countries all over the world are trying to get

explorers in. There's been a lot of talk about how the State should use the same regime that Norway does, but that does­n't explain the Norway terms.

"People don't understand what the Norway terms are, if you spend money on explo­ration there it's the cheapest place in the world.

"Ifyou spend $100m (€77m) on drilling and don't find any­thing, the Norwegian state gives you a rebate of $78m. They only hit you with tax if you are able to bring your oil to market," he

At Tullow Oil's Dublin shareholder meeting yesterday were chief executive Aidan Heavey (right) and company secretary Graham Martin. MARKSTEDMAN

PHOTOCALL IRELAND

added. There has been huge interest in the possibility of suc­cessful oil exploration around Ireland, especially since Provi­dence Resources found more than one billion barrels of the stuff off Cork, but Mr Heavey made clear the jury was still out on Ireland as a destination for explorers.

"Until we see the really big, deep water reserves of the kind that attract the supermajors, we'll have to wait and see. There is oil here, but it hasn't come to market yet," he added,

First-quarter UTV revenue down Spc Peter Flanagan

SHARES in UTV fell yesterday, after the media group reported lower sales than_ expected in

licence for ITV in Northem Ire­land.

Only the smallest segment of the business - New Media - saw grovrth during the quarter. Turnover there rose 9pc to

to adverse market conditions and the absence of a major sporting event in the first half of 2013".

"Industry forecasts for radio and television are positive for v.oth 2013 and 2014. Forecasts

m€PVNT Barnier eyes 'excessive' esecs IT'S the well-worn argument that to attract the best busi­ness brains, you must pay top dollar for their services.

The counter-argument holds true about what you vrill end up with by paying peanuts.

But the European Union's financial services chief wants to change all that by question­ing "excessive" bonuses and calling for greater scratiny of golden parachute pay pack­ages to departing executives.

Michel Barnier (pictured), the EU Commissioner for Intemal Markets and Ser­vices, feels that the financial crisis had shown that exces­sive bonuses can lead to excessive risk taking and that big bonuses also raise issues of social justice.

He expounded his views in a video message to delegates attending European Corpo­rate Govemance conference, 'Actions for Better Business', which opened in DubUn yes­terday.

"Lucrative severance pack­ages for managers who have underperformed are the sub­ject of increasing criticism," the commissioner remarked.

"Shareholders now care about the relationship between execu­

tive compensation and the performance of the company."

Corporate govemance and company law can be heavy going at the best of times and" prompted one observer yes­terday to conclude that it was a "yawnfest".

But Jobs and Enterprise Minister Richard Bruton, who opened the conference, thinks • otherwise and beheves that one of the lessons of recent years is that good corporate govemance is a key factor in the long-term performance of companies.

" I am absolutely convinced that a robust governance sys­tem is integral to a sustain­able and entrepreneurial business environment," he told delegates.

NAMA doesn't miss a trick YOU can say what you like about them, but NAMA's Brendan McDonagh and Prank Daly never miss a trick.

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