Belfast Telegraph

Shell strikes price to sell 45% stake in gas venture

By Holly Williams

Royal Dutch Shell has agreed a deal worth up to $1.23bn (£956m) to sell its stake in an Irish gas project, in a move ending its exploration and production in the country.

The oil giant is offloading its 45% stake in the Corrib gas venture to a subsidiary of the Canada Pension Plan Investment Board.

The Canadian investment group will pay $947m (£736m) up-front and additional payments of up to $285m (£222m), depending on gas prices and production.

The deal will see Shell exit its so-called upstream operations in Ireland, with its Shell Aviation joint venture based at Dublin airport set to be its sole remaining operation in the country.

It comes as part of Shell's efforts to offload assets following its takeover of smaller rival BG Group last year.

Shell has sold off more than $20bn (£16bn) of assets since the BG takeover.

Around 100 staff employed by Shell will move over to the new owners of Corrib, with Canadian-based Vermilion Energy - which already owns 18.5% of the gas field - becoming the operating company.

It is thought there are no plans for job losses among affected staff and the offices in Co Mayo and Dublin are expected to be retained after the deal, which is set to complete in the second quarter of 2018.

Shell said it will take a $350m (£272m) impairment charge on the Corrib deal.

Shell's share of Corrib gas output amounts to the equivalent of around 27,000 barrels of oil a day.

Shares in Shell were nearly 2% higher after news of the deal.

The Corrib gas field was first discovered off the north west coast of Ireland in 1996, but it was mired in controversy and the first gas was only processed in late 2015, some 19 years later.

During development, millions were spent policing protests, facilitating workers and securing sites around north Mayo in the face of deep opposition locally and from environmentalists.

Five local men, who opposed a pipeline to an onshore refinery, were jailed for 94 days in 2005 for defying a court order not to protest over the Shell project.

Part of the wider objections included the Republic's once-generous tax regime for oil and gas exploration.

At peak production, Corrib has the potential to meet up to 60% of Ireland's gas needs with a 20-year supply expected.

Belfast Telegraph

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.