Monday 10 December 2018

Shell hit for further €89m loss as it awaits completion of Corrib gas field sale

 

A billion-euro acquisition deal struck last year by a giant Canadian pension fund for Shell’s holds in the Corrib gas field still has not been fully completed. (stock picture)
A billion-euro acquisition deal struck last year by a giant Canadian pension fund for Shell’s holds in the Corrib gas field still has not been fully completed. (stock picture)

Fearghal O'Connor

Pre-tax losses at Shell's Corrib gas field operation fell substantially last year, from €187m to €89m, according to newly-filed financial results.

A massive billion-euro acquisition deal struck last year by a giant Canadian pension fund for Shell's 45pc holding in the controversial gas field off the Mayo coast still has not been fully completed.

Turnover at Shell E&P Ireland - the Irish-registered company that holds the asset on behalf of the Dutch giant - jumped from €182m to €258m. The company benefited from a taxation benefit of €14.4m last year, part of total deferred tax assets of €424m it holds.The Corrib field contributes up to 60pc of Ireland's natural gas requirements, sustains 102 jobs and Shell E&P Ireland's net assets are worth €1.3bn, according to its accounts.

In July 2017 Shell signed a definitive purchase-and-sale agreement that would see Canada Pension Plan Investment Board (CPPIB) acquire 100pc of Shell E&P Ireland for a total initial cash consideration of €830m, with additional payments of up to €250m between 2018-2025, subject to gas price and production.

The deal, which represents Shell's exit from the upstream business in Ireland, would mean a reported loss of up to €2bn for the Dutch giant on the project and was originally due to be completed in the second quarter of this year.

"The transaction is progressing towards completion and we are working with our partners to ensure a smooth transition to the new operator occurs. The formal application for government consent has been submitted, and we understand the process is expected to conclude later this year. Completion of the transaction can subsequently take place," said a statement from CPPIB.

The pension fund has a strategic partnership with Calgary-based Vermilion Energy to operate the Corrib assets after completion of the acquisition. Shell said in its accounts that the partnership was "well placed to successfully own and manage Corrib".

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