Statoil Ireland reports €187.5m loss due to Corrib gas project

Full-year loss due primarily to €165 million impairment charge

The huge cost overrun on the Corrib gas development is estimated to have cost the State at least €600 million in tax revenue. Photograph: Dara Mac Dónaill

The huge cost overrun on the Corrib gas development is estimated to have cost the State at least €600 million in tax revenue. Photograph: Dara Mac Dónaill

 

Statoil’s Irish subsidiary, which owns a 36.5 per cent stake in the Corrib gas field off the west coast of Ireland, saw losses narrow last year, newly filed accounts show.

The company reported a pretax loss of €187.5 million for the 12 months ending December 2015, as against €243.7 million a year earlier. The loss is primarily due to an impairment charge of €165 million.

Turnover totalled €7.08 million, according to the accounts.

Norway’s Statoil, which earlier this year injected €150 million into its Irish unit, is a partner in the Corrib field along with Shell Exploration and Production Ireland and Vermilion Energy of Canada.

The Corrib gas field, which is located 83km off the northwest coast in depths of almost 350m, is the most expensive energy infrastructure project in Ireland and the largest since the Ardnacrusha hydroelectric scheme on the Shannon in the 1920s.

Cost overrun

The €3.5 billion development officially opened at the end of January, almost 20 years after the gas discovery was reported off the north Mayo coast. The gas was initially projected to start flowing back in 2002 at a cost of €800 million, but faced a series of delays.

The huge cost overrun on the development is estimated to have cost the State at least €600 million in tax revenue.

The field is expected to produce the equivalent of 45,000 barrels of oil per day. At peak production, Corrib has the potential to meet up to 60 per cent of Ireland’s gas needs, according to its operators.

Statoil Exploration (Ireland) Limited said it had net assets of €249 million at the end of 2015, as against €286 million a year earlier.