Six oil companies have sought exploration licences to drill for oil and gas off the west coast under the Government's new licensing round, even though taxes on discoveries have been substantially increased.
Up to now, energy companies have paid 25 per cent in taxes to the State after all costs have been deducted, but Minister for Communications, Energy and Natural Resources Eamon Ryan has increased this to 40 per cent.
The bidding companies, including oil major Exxon Mobil, have put together four applications to drill in the Porcupine Basin next year, at a cost of $100 million (€68 million) or more.
Exxon Mobil, Providence Resources - which is half-owned by Sir Anthony O'Reilly - and Scottish energy company Sosina Exploration have combined to lodge two applications.
Island Oil and Gas and Supernova Ireland Resources BV have put together an application, while Providence and Sosina have come together for a second application with Challenger Minerals.
All of the applications received before the December 18th closing date are expected to be approved by Mr Ryan when he makes a final decision at the end of next month.
He said: "We hope that the applications received under the round will lead to the discovery and development of new hydrocarbon resources and reduce Ireland's long-term dependence on energy imports."
Ireland is the most oil-dependent country in the EU, securing two-thirds of its energy needs from oil compared to an EU average of 42 per cent.
The fact that the same number of applications has been received under the current round is regarded as proof by the department that the new tax rate has been well-judged, although opponents will argue that it is proof that it remains too low.
Under the new licensing terms a "profit resource rent tax" will apply to the most profitable fields found, if any, along with the standard 25 per cent corporation tax rate that is already in place.
In a bid to encourage the companies to exploit less-profitable fields, a lower rate of the profit resource tax will apply in such cases, ranging from an extra 5 per cent up to an extra 10 per cent.
However, the changes are unlikely to offer any immediate tax boost for the Exchequer even if finds are made quickly, since Mr Ryan has acknowledged that that it could take a decade if finds are made.
The duration of deep-water licences will be reduced from 12 years to nine, while Mr Ryan will also have greater powers to vary the duration of individual elements of a licence.
The energy companies will relinquish half of the territory covered by their licence at the end of the first phase of exploration, and a quarter more will be ceded back to the State at a later stage.
Drilling rules have also been tightened, though only marginally.
Companies will have to drill their first well within three years of getting approval - rather than four as now - and a second within six years, and not within eight.
