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Minister approves sale of key Mayo gasfield

Mark Tighe, Peter O’Dwyer - The Times

The sale of Shell’s stake in the Corrib gasfield has moved a step closer to completion after Richard Bruton signed off on the proposed deal.

The recently appointed environment minister yesterday approved the sale of Shell’s 45 per cent stake in the Mayo gas project to Nephin Energy. The deal is understood to be worth about €830 million. Nephin is a wholly owned indirect subsidiary of the Canada Pension Plan Investment Board (CPPIB).

A spokesman for the Department of Communications said that the minister had “approved the assignment of Shell’s interest in the Corrib Petroleum Lease to Nephin Energy”.

The Corrib gasfield accounted for approximately 60 per cent of Ireland’s gas demand in 2017, he said.

A spokeswoman for Shell, which had hoped for the Corrib sale to be completed by the end of June, could not be reached last night. A CPPIB spokesman declined to comment on the minister signing off on the sale, but said that it was “working towards completing the deal by the end of the year”.

Gaining the minister’s approval was one of the last remaining steps needed for the deal to close.

The Sunday Times revealed last month that the state could have faced liabilities of many millions of euros if there had been an accident at the Corrib gasfield at any time in the past 16 years. An oversight meant that there was no power to make Royal Dutch Shell, the project’s largest shareholder, pay compensation. While reviewing Shell’s proposed sale this year, the government discovered that Royal Dutch Shell, the ultimate parent company of Shell Ireland, was not registered as a guarantor, as required under its lease.

As part of the proposed sale, CPPIB wanted to limit its potential liabilities to €300 million, but this was rejected by the department. The Canadians said that as a public pension fund they could not take on unlimited liabilities.

Revenues for the Corrib gas partners increased by 20 per cent to about €188 million in the first quarter this year as they benefited from a rise in the price of gas, figures provided by Vermilion, a Canadian firm with an 18.5 per cent share of the gasfield, showed.

Posted Date: 
28 November 2018