Skip to main content

Corrib firm doesn’t expect to pay tax for some time

By: 
Gordon Deegan - Irish Examiner

The new operator of Corrib Gas field has told investors it doesn’t expect to pay tax from profits on the project “for the foreseeable future”.

 

 

Last month, Shell Ireland disposed of its shareholding in the project to the Canadian Pension Plan Investment Board in a deal worth just over €1bn.

That left Canada’s Vermilion Energy, which already owns 18.5% of the field, as the main operator.

In an update to investors, Vermilion said: “As a result of our tax pools in Ireland, we do not expect to incur current income taxes in the Ireland Business Unit for the foreseeable future”.

Shell E&P Ireland Ltd had received €186m so far in tax credits. Vermilion said other characteristics of the Irish project include “no royalties, low operational expenditure and minimal ongoing capital expenditure translate to high netback and significant free cashflow”.

From its 18.5% stake, Vermilion accounted for $81.31m (€54.3m) in revenues from the field in the first six months of the year, double the revenues from a year earlier. It said there was “limited capital activity planned for 2017” on the project. The Corrib partners invested more than €3.6bn.

The gas field was first discovered in 1996, but it was mired in controversy and the first gas was only processed in late 2015, 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.

At peak production, Corrib has the potential to meet up to 60% of Irish gas needs.

Posted Date: 
15 August 2017