Revenues at Corrib gas field rise by 34% last year to €734m

Accounts filed by Canadian operator Vermilion Energy highlight the jump in income in 2018 at the Mayo gas field

An aerial view of the Sedco 711 drilling rig at the Corrib gas field

An aerial view of the Sedco 711 drilling rig at the Corrib gas field

 

A sharp increase in the price of gas in Ireland last year contributed to revenues for the Corrib gas field increasing by 34 per cent to an estimated €734 million.

Accounts just filed by the new operator, Canada’s Vermilion Energy, show a jump in its revenue share from of the west of Ireland gas field from 153 million Canadian dollars (€101 million) in 2017 to 205 million Canadian dollars.

Based on Vermilion’s 18.5 per cent share of the field for the year until December 21st when it increased its share in the field to 20 per cent, total estimated revenues for the entire field increased to 1.1 billion Canadian dollars or €734 million in 2018.This was in spite of production being down 6 per cent on 2017.

Shell Ireland last year disposed of its shareholding in the project to the Canadian Pension Plan Investment Board in a strategic partnership with Vermilion.

The deal with Shell included an initial consideration of €840 million, interest of €47 million, and additional payments of up to €250 million between now and 2025, subject to gas prices and production.

The Vermilion report states that sales per gas unit increased in the fourth quarter of 2018 versus all comparable periods due to the increase in the price of gas.

Investment

The annual report states that “given the significant level of investment in Corrib, and the resulting tax pools, we do not expect to incur any current income taxes in the Irish business unit for the foreseeable future”.

The Vermilion annual report states that the firm’s unused tax losses from its Irish operations total 1.3 billion Canadian dollars at the end of December 2018 “and do not expire”.

The Corrib partners – which also includes Statoil with a 36.5 per cent share – invested more than €3.6 billion in the project before gas started to flow, more than four times the original estimate of €800 million.

Gas was originally expected to flow from the field in 2003, resulting in the project being 12 years behind the original schedule.