Corrib gas field operator benefits from soaring energy prices

Vermilion Energy’s revenues from Corrib last year rose by 267%

Soaring gas prices ensured that revenues recorded by Vermilion Energy from the Corrib Gas field off the Mayo coast last year increased almost fourfold to CAN$214.4 million Canadian dollars (€152.86 million).

According to the newly published 2021 annual report by the Canadian company Vermilion Energy, almost half of its 2021 Corrib gas sales occurred in the final quarter of last year with income of $109.3 million from October 1st to the end of December.

Vermilion’s revenues from Corrib at $214.42 million last year compared to revenues of $58.44 million in 2020 – an increase of 267 per cent.

The average price that Vermilion received for its Corrib gas in the final quarter was almost six times the average price for the corresponding quarter in 2020 and more than nine times the average across the whole of 2020.

The surge in revenue occurred despite the volumes of natural gas being produced from the field reducing due to a natural decline in the resource.

The gas produced from Corrib represents 100 per cent of Ireland’s domestic production of natural gas.

Vermilion state that production volumes reached full plant capacity at the end of 2016 “and production plateaued at this level until decline started at the beginning of 2018”.

In a message to shareholders Vermilion Energy said: “European natural gas prices were exceptionally strong, increasing approximately 88 per cent compared to the previous quarter.”

Shareholding

Vermilion is the operator of the Corrib Gas field and held a 20 per cent stake in the project for 2021.

As a result of a $556 million deal last November, Vermilion acquired an additional 36.5 per cent share after it agreed to purchase Equinor’s shareholding in the field.

The deal took effect from January 1st this year. The report states that during 2022, Vermilion plans to continue to focus on facility maintenance and optimisation.

The strong performance of Corrib contributed to revenues at Vermilion Energy soaring by $900 million or 79 per cent to $2.04 billion last year. The business recorded pretax profits of $1.38 billion in 2021 after losses of $1.87 billion in 2020.

Gordon Deegan

Gordon Deegan

Gordon Deegan is a contributor to The Irish Times