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Shell sells controversial Corrib gas project

Áine Ryan: 18 July 2017

IT was always about ‘sovereignty’ for retired teacher and one of the Rossport Five, Vincent McGrath. So last week’s news that Shell is in the process of selling the controversial Corrib Gas project reminded him of the lines from the War of Independence poem, Shanagolden:
“These hills are at peace again, the Saxon stranger gone.”

Speaking to The Mayo News yesterday (Monday), Mr McGrath, who with four other local men spent 94 days in jail in 2005 for flouting an injunction allowing Shell onto their lands, said: “For me it was always about sovereignty and the health and safety of our community and our Government ceded this to Shell and thus failed in their primary duty to protect their citizens in Erris.”

He also said that Shell had constantly used the mantra of ‘security of supply’ for the Irish nation but they could have easily decided to sell the Corrib field and refinery to Russian president Vladimir Putin instead of a Canadian pension fund, which, he notes, will now benefit from the profits from the Irish natural resource.

Mr McGrath was responding to the fact that last week Royal Dutch Shell confirmed its Irish subsidiary Shell E&P Ireland is selling its Irish interests including its majority share of the Corrib Gas project to Canadian partner, Vermillion, for €1.08 billion.

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.

Canadian pension plan
THE company announced last Wednesday 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,” a Shell statement said.

The sale is subject to partner and regulatory consents and is projected 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.
Shell, reportedly, is set to lose €1billion on its investment in the Corrib Gas project.


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