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Corrib revenues tumble as gas prices hit decade lows

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Results: The Corrib field lies off the coast of Co Mayo

Results: The Corrib field lies off the coast of Co Mayo

Results: The Corrib field lies off the coast of Co Mayo

A drop in the price of natural gas drove revenues from the Corrib Gas field sharply lower last year, halving to CA$521.37m (€334.7m).

The slump in sales at the field is contained in annual accounts for 2019 for Canadian company Vermilion Energy, which now operates the site off the Co Mayo coast.

Vermilion Energy has a 20pc share in the field. The company's sales from Corrib Gas last year declined by 49pc, to $104.27m from $205.15m.

According to Vermilion Energy, the drop in sales was a result of lower gas prices and a natural decline in production of gas at the field.

Last year, the market price for gas fell by half to reach lows not seen in a decade, due mainly to a deluge of gas supplies into Europe.

According to the latest Vermilion Energy report, production at Corrib Gas in the final quarter of last year decreased by 19pc compared with the corresponding period of 2018, due to a combination of unplanned downtime and natural decline.

Vermilion's revenues from sales reduced to $21.82m from $53.38m in the final quarter of 2019.

The report also stated that for the final quarter of last year, operating expenses decreased versus all comparable periods "due to Vermilion's focus on cost management following our appointment as operator in December 2018".

Vermilion added: "Since assuming operatorship of Corrib at the end of 2018, we have reduced operating costs by approximately 20pc and continue to evaluate other optimisation opportunities."

The energy company also stated that "given the significant level of investment in Corrib and the resulting tax pools, we do not expect to incur current income taxes in the Ireland Business Unit (IBU) for the foreseeable future".

The Vermilion annual report stated that the firm's unused tax losses from its Irish operations totalled $1.12bn at the end of December 2019.

In 2018, the former operator of the field, Shell Ireland, disposed of its shareholding in the project to the Canada Pension Plan Investment Board, in a strategic partnership with Vermilion.

The deal with Shell Ireland included an initial consideration of €840m and interest of €47m, as well as additional payments of up to €250m between now and 2025, subject to gas prices and production.

Irish Independent