Shell, through its affiliate, Shell Overseas Holdings Limited, is selling its controversial Corrib gas field to its Canadian Partner for a sum of €1.08 billion.
The Dutch oil and gas giant announced that it has struck up a deal with a subsidiary of the Canada Pension Plan Investment Board (CPPIB) to offload its shares in Shell E&P Ireland Limited, which owns a 45% stake in the gas field based in Bellanaboy, County Mayo.
The transaction includes an initial consideration of $947m (€830m) and additional payments of up to $285m (€250m) between 2018-2025, subject to gas price and production.
The transaction, which represents Shell’s exit from the upstream business in Ireland, is subject to partner and regulatory consents and is expected to complete in the second quarter of 2018.
CPPIB will be the new Corrib Gas JV partner and Vermilion will become the new operator of the Corrib Gas Venture.
“This transaction is part of our strategy to reshape Shell and to deliver a world-class investment case,” said Shell’s Upstream Director, Andy Brown. “It demonstrates the strong momentum behind our three-year $30 billion divestment programme. At the half-way point, we have now announced deals valued at more than $20 billion.”
“This transaction is consistent with Shell’s strategy to concentrate our Upstream footprint where we can add most value. I’m confident that Corrib will continue to deliver energy successfully to the people and businesses of Ireland.”
Ronan Deasy, Shell’s chairman in Ireland, said: “Shell is very proud to have led the development of the Corrib gas field. Since coming on-stream, the field and facilities have delivered exceptional performance. I would like to pay tribute to all those who have contributed to the development of this important energy project. In particular, I wish to acknowledge our staff, stakeholders and the local community who have worked closely with us over the years.
“With our existing staff remaining with the asset – CPPIB as a partner and Vermilion, as the operator, will be well placed to successfully own and manage Corrib.”
Shell will retain a presence in Ireland through its aviation joint venture, Shell and Topaz Aviation Ireland Ltd, based near Dublin airport.