S.I. No. 558/2014 - Electricity Regulation Act 1999 (Petroleum Safety) Levy Order 2014.

1. Under the Act, as amended by the

Petroleum (Exploration and Extraction) Safety Act 2010

, the Commission is required to establish and implement a risk-based petroleum safety framework (the “safety framework”). The levy will recover the Commission’s costs for establishing and implementing the safety framework (the “Establishment Costs”) and the operation of the safety framework (the “Operational Costs”).

2. Reference to an approved well work safety case includes any associated approved non production safety case or approved production safety case in connection with the specified well work activity.

Establishment Costs Recovery

3. The Establishment Costs for the Levy Year are €1,900,000

4. Establishment Costs will be recovered from Relevant Undertakings

5. For Relevant Undertakings that carry out or propose to carry out Production activities, the apportionment of Establishment Costs will be split as follows

a) 40% based on infrastructure; and

b) 60% based on estimated production volumes for a 15 year period.

Establishment Cost Recovery Methodology — Infrastructure

6. The infrastructure portion of the Establishment Costs will be apportioned based on (

a

) petroleum infrastructure in situ; and (

b

) petroleum infrastructure proposed to be in situ. Table 1 below identifies the types of infrastructure that will incur costs under the levy for Establishment Costs along with their associated weighting.

Reference

Infrastructure

Weighting

A

Onshore Facility

5

B

Manned Offshore Facility

5

C

Unmanned Offshore Facility

2

D

Subsea infrastructure*

3

E

Onshore Pipeline

3

Table 1: Infrastructure types for Establishment Costs and associated weightings

*The infrastructure term ‘Sub sea Infrastructure’ incorporates the sub sea pipeline(

s

) and sub sea wells and well infrastructure.

7. The combined weightings of all Relevant Undertakings will be the

total weighting

.

8. Each Relevant Undertaking will pay an Establishment Costs levy amount equivalent to the proportion of their weighting to the total weighting. The calculation is

Relevant Undertaking’s weighting______________Total weighting

* 40% Establishment Costs

Establishment Cost Recovery Methodology — Production Volumes

9. Relevant Undertakings will submit their estimated production volume profile for a 15 year period to the Commission.The data submitted may be independently verified by the Commission for Energy Regulation.

10. The combined estimated production volumes submitted by all Relevant Undertakings will be the

total estimated production volume

. Each Relevant Undertaking will pay the estimated production volume portion of the Establishment Costs based on the proportion of their estimated production volume to the total estimated production volume. The calculation is

Relevant Undertaking’s Estimated Production Volume (15 year)______________Total Estimated Production Volumes

* 60% Establishment Costs

Estimated production volumes are to be submitted to the Commission using billion cubic metres (bcm) of gas or the equivalent metric for oil.

Establishment Costs — well work contribution

11. Relevant Undertakings who will hold an approved well work safety case during 2015 are subject to payment of the Establishment Costs. The Calculation is

Final Safety Case Fee X Number ofDays the Rig is on location in a calendar year

______________

365 (days in a year)

Relevant Undertakings who will hold an approved well work safety case during 2015 will be levied in 2016.

12. The calculation of the Establishment Costs portion of the 2016 levy will account for well work contributions in respect of well work in 2015.

Operational Cost Recovery

13. The Operational Costs for the Levy Year are €2,215,632

14. Operational Costs will be recovered from Relevant Undertakings

Operational Cost Recovery Methodology — Infrastructure

15. Operational Costs will apply to petroleum undertakings that carry out, or propose to carry out, designated petroleum activities and have, or propose to have, the types of Infrastructure set out in Table 2 in situ.

16. Operational Costs will be apportioned based on (

a

) petroleum infrastructure in situ; and (

b

) petroleum infrastructure proposed to be in situ. Table 2 below identifies the types of Infrastructure that will incur costs under the Levy for Operational Costs along with their associated weighting.

Reference

Infrastructure

Weighting

A

Onshore Facility

5

B

Manned Offshore Facility

5

C

Unmanned Offshore Facility

2

D

Subsea Pipeline

3

E

Onshore Pipeline

3

F

Well(s) (under a single approved well work safety case) **

3

Table 2: Infrastructure types for Operational Costs and associated weightings.

**Reference F, Wells, refers to a well or wells under a single approved well work safety case only. This does not include wells under a production safety case. Under a production safety case, the wells will be included as part of the weighting assigned to the most appropriate infrastructure type references A to E. The most appropriate infrastructure type into which wells will be assigned will be decided on a case by case basis.

17. Relevant Undertakings holding an approved well work safety case in 2015 will pay the associated levy contribution via the 2016 Levy as per the above methodology.

18. The calculation of the Operational Costs portion of the 2016 levy will account for well work contributions in respect of well work in 2015.

Variable Weightings for Establishment and Operational Costs

19. The Commission recognises that different infrastructure employed by Relevant Undertakings has the potential to require different levels of safety regulation by the Commission under the safety framework. To this end, all weightings indicated in Table 1 and Table 2 are variable and indicate the maximum weighting that can be applied.

20. To determine the weighting for a specific piece of infrastructure, the Commission will make an assessment to determine the intensity of resources required to perform the Commission’s safety regulatory functions under the Act in relation to such infrastructure (and associated Production Activity). The assessment of the appropriate weighting for such infrastructure for each Relevant Undertaking will be carried out on a case by case basis and in accordance with the Commission’s duty to act consistently. The Commission will consult with Relevant Undertakings on the proposed weighting to be applied to it before it is imposed. Following the assessment and where deemed equitable by the Commission, the Commissionmay lower the weighting to zero.

Sealed with the common seal of the Commission for Energy Regulation,

9 December 2014.

GARRETT BLANEY,

Chairperson of the Commission.

EXPLANATORY NOTE

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

This order imposes a levy on certain specified classes of petroleum undertakings, for the purpose of meeting expenses properly incurred by the Commission for Energy Regulation in the discharge of its functions under the

Petroleum (Exploration and Extraction) Safety Act 2010

.

S.I. No. 558 of 2014

ELECTRICITY REGULATION ACT 1999 (PETROLEUM SAFETY) LEVY ORDER 2014

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of

12

th December

, 2014.

The Commission for Energy Regulation in exercise of the powers conferred on it by the

Electricity Regulation Act 1999

(No. 23 of 1999) as amended by the

Petroleum (Exploration and Extraction) Safety Act 2010

(No. 4 of 2010), hereby makes the following Order