Thursday 27 October 2016

Shell Corrib firm gets €70m cash injection

Published 04/02/2016 | 02:30

Shell owns a 45pc stake in the Corrib field. Photo: Reuters
Shell owns a 45pc stake in the Corrib field. Photo: Reuters

Oil giant Shell injected €70m into its Irish unit that's behind the Corrib gas project in recent months as the field prepared to begin delivering gas, new filings show.

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The Corrib gas field is located 83km off Ireland's west coast in depths of almost 350 metres.

Gas began flowing from the field only in the past few weeks - 11 years behind schedule.

Shell owns a 45pc stake in the Corrib field, with Norway's Statoil owning 36.5pc. Canadian firm Vermilion owns 18.5pc.

Over €3.5bn has been spent developing the Corrib project since the large gas field was discovered in 1996.

The field is expected to produce the equivalent of 45,000 barrels of oil per day and has a projected lifespan of between 15 and 20 years.

The gas reservoir is about 3,000 metres below the seabed and contains about one trillion cubic feet of gas.

Filings at the Companies Registration Office show €70m was pumped into Shell E&P Ireland during 2015, which followed €207m that it received in 2014.

Statoil's Irish division behind the Corrib project received a €150m top-up from its parent in December.

Although the Corrib field will initially produce enough gas to provide 60pc of Ireland's requirements at peak supply, that peak output reduces quite quickly after the field has started production.

Six wells have been drilled at the Corrib field. Gas is transported from there to the Bellanaboy Bridge gas terminal. The gas is then processed at Bellanaboy before joining the gas network.

The official launch of the Corrib project took place last week, with the Minister of State at the Department of Communications, Energy and Natural Resources, Joe McHugh, attending.

"Corrib has been unique in many ways," said Shell E&P Ireland managing director Ronan Deasy at the launch.

"As the largest energy investment in Ireland, the development will not only strengthen our country's security of supply but will continue to bring many benefits to Erris, Mayo and Ireland more broadly," he insisted.

Vermilion bought its Corrib stake from energy firm Marathon in June 2009, agreeing to pay up to $400m for the holding.

It used vehicles in Luxembourg to help cut its tax liability in relation to the field.

Vermilion told Luxembourg authorities in 2009 that it expected to invest as much as $400m in developing Corrib. It used a French subsidiary to acquire its stake.

It then planned to use entities in Luxembourg, Hungary, the Cayman Islands and Barbados to effect a transfer of loans from a new Luxembourg vehicle to other group firms.

Royal Dutch Shell releases full-year results today, with its figures expected to reflect the plunging price of oil.

Rival BP this week reported a record annual loss and said it will axe 7,000 jobs.

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