Corrib revenues up despite fall in output

By Gordon Deegan

A jump in the price of gas over the past year helped the owners of the Corrib gas field generate a 20% rise in revenues in the first quarter of this year, despite a fall in production rates.

Revenues from the field, for the first three months of the year, amounted to €188m, despite production being down by 6% on the same period last year.

Canadian firm Vermilion confirmed the gas field may already be past peak production, saying “the initiation of decline from the Corrib gas field” has commenced.

Corrib gas.

Last July, Shell Ireland disposed of its shareholding in the project to the Canadian Pension Plan Investment Board (CPPIB) in a strategic partnership with Vermilion in a deal potentially worth as much as €1.08bn.

Vermilion is to increase its stake to 20% and become the operator of the project when the deal closes.

Providing an update on the deal, Vermilion said it expects the deal to close in the middle of this year.

Vermilion’s quarterly report said that “given the significant level of investment in Corrib and the resulting tax pools, we do not expect to incur current income taxes in the Ireland business unit for the foreseeable future”.

At the end of last year, Vermilion had accumulated tax losses of $1.3bn which can be carried forward at 100% against taxable income.

The Corrib Partners invested more than €3.6bn in the project before gas started to flow — more than four times the original estimate of €800m.

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

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