Shell is selling the controversial Corrib gas field to its Canadian partner in the project for €1.08 billion, The Mayo News can reveal. As staff at the Bellanaboy refinery were reportedly due to be told this morning of the decision, Royal Dutch Shell has confirmed that it is selling all its Irish operations under its subsidiary, Shell E&P Ireland.
While rumours circulated about a possible sale, locals contacted by The Mayo News this morning were not aware of the news.
It is just 18 months since gas production began at the Erris project, which caused much community divide and was the subject of the most public inquiries in the history of the State.
As majority shareholder (45 percent) with Vermillion and Statoil, the Shell share of the Corrib gas venture’s production represented 27,000 barrels of oil each day in 2016.
The company announced this morning that ‘Shell Overseas Holdings Limited, has reached an agreement with CPP Investment Board (CPPIB) Europe SARL a wholly owned subsidiary of Canada Pension Plan Investment Board to sell its shares in Shell E&P Ireland Limited’.
“The transaction includes an initial consideration of $947 million (€830 million) and additional payments of up to $285 million (€250 million) between 2018-2025, subject to gas price and production, the Shell says.
The sale is subject to partner and regulatory consents and is project to be completed by the middle of 2018.
CPPIB will be the new Corrib Gas JV partner and Vermilion will become the new operator of the Corrib Gas Venture.
“This transaction is part of our strategy to reshape Shell and to deliver a world-class investment case,” said Shell’s Upstream Director, Andy Brown. “It demonstrates the strong momentum behind our three-year $30 billion divestment programme. At the half-way point, we have now announced deals valued at more than $20 billion.”
“This transaction is consistent with Shell’s strategy to concentrate our Upstream footprint where we can add most value. I’m confident that Corrib will continue to deliver energy successfully to the people and businesses of Ireland.”
Ronan Deasy, Shell’s chairman in Ireland, said: “Shell is very proud to have led the development of the Corrib gas field. Since coming on-stream, the field and facilities have delivered exceptional performance. I would like to pay tribute to all those who have contributed to the development of this important energy project. In particular, I wish to acknowledge our staff, stakeholders and the local community who have worked closely with us over the years.
“With our existing staff remaining with the asset – CPPIB as a partner and Vermilion, as the operator, will be well placed to successfully own and manage Corrib.”
Shell will retain a presence in Ireland through its aviation joint venture, Shell and Topaz Aviation Ireland Ltd, based near Dublin airport.