Firm seeks €157m for Corrib gas stake

One of three oil groups behind the Corrib gas development is seeking to sell its stake for up to €157 million.

The US group Marathon Petroleum, owner of 18.5 per cent of the field, is understood to have put its stake on the market in the past three weeks. Marathon, whose spokeswoman declined to comment yesterday, is believed to be concentrating on a new development at the Seven Heads field off the Co Cork coast.

It is thought the company is keen to conclude the sale before An Bord Pleanála decides whether a terminal required to treat gas before it enters the national grid should go ahead.

A refusal to sanction the plans by Marathon's partners Shell and Statoil would significantly diminish the value of the US group's stake. Informed figures have estimated that the company is seeking up to €157 million for the stake.

Marathon's decision to exit Corrib follows moves by the US-Scottish group, Ramco, to exploit the Seven Heads field off Cork by piping the gas through Marathon's terminal at the Kinsale field nearby. The Kinsale field is almost depleted but there are suggestions that Marathon will embark on a new exploration project off the Cork coast if it sells its stake in Corrib.

Spokeswomen for Shell and Statoil both declined to comment yesterday when asked about the sale process. Shell owns 45 per cent of Corrib and Statoil owns 36.5 per cent. Both are among a large number of companies who are assessing a sale prospectus circulated to industry players by the London-based oil and gas consultancy Harrison Lovegrove. It is unclear, however, whether the partners will increase their stakes in the field.

It is considered unlikely by informed industry figures that Bord Gáis would purchase the stake. The State company has traditionally shirked exploration projects and is more likely to purchase gas from the field than to develop it. In addition, Bord Gáis is investing heavily in the construction of a new loopline between Dublin and Cork, via Galway and Limerick, and in a new gas interconnector linking Dublin and Moffat, west Scotland.

The Corrib project has been beset with difficulty. Planning permission for a gas terminal in Co Mayo is the subject of a second Bord Pleanála hearing in Ballina which started last week.

In addition, the partners were hit with a €31 million bill due to the cancellation of a contract to hire a barge to lay a pipeline from the field to the Co Mayo coast. That penalty is currently the subject of negotiations with the owners of the barge.