MOSCOW (MRC) -- Oil major Shell has left the upstream sector in Ireland following the sale of its interest in the Corrib gas project, as per Offshore EnergyToday.
The Corrib natural gas field lies some 83km off the northwest coast of Ireland, approximately 3,000 meters under the seabed and in waters 350 meters deep. The field development started production on December 30, 2015.
The initial development comprises six subsea wells, and gas is transported through an 83 km pipeline to an onshore gas processing terminal. The gas is exported from the terminal via the Bord Gais Eireann link line to the existing Irish gas grid.
Shell said on Friday it had completed the previously announced sale of its shares in Shell E&P Ireland Limited (SEPIL), which holds a 45% interest in the Corrib gas venture, for up to USD1.3 billion to Nephin Energy Holdings Limited (NEHL), a wholly-owned subsidiary of Canada Pension Plan Investment Board (CPPIB).
Completion follows receipt of all necessary partner and regulatory consents and the transaction’s effective date is January 1, 2017, Shell said.
The transaction includes an initial consideration of USD958 million (EUR840 million), an interest of USD54 million (EUR47 million), and additional payments of up to USD285 million (EUR250 million) between 2018- 2025, subject to gas price and production. Completion of the deal represents Shell’s exit from the upstream sector in Ireland.
Shell’s share of the Corrib gas venture’s production represented approximately 27,000 barrels of oil equivalent/day in 2016.
The sale will contribute to Shell’s USD30 billion divestment target for 2016-2018. Shell Energy Europe Limited (SEEL) has signed an offtake agreement to purchase Corrib gas following completion.
CPPIB is the new Corrib Gas JV partner and Vermilion, as per the strategic partnership agreement with CPPIB, is the new operator of the Corrib Gas Venture.
CPPIB plans to transfer SEPIL along with a 1.5% working interest to Vermilion.
Vermilion said on Friday that this transfer had received all required government approvals and is expected to be completed in the coming weeks. The estimated purchase price after interim period adjustments is approximately €6 million.
Following the transfer, Vermilion will hold a 20% operated interest in Corrib, NEHL will hold a 43.5% non-operated interest, and Equinor continues to hold a 36.5% non-operated interest.
Shell retains a presence in Ireland through its aviation joint venture, Shell and Topaz Aviation Ireland Limited.
Shell on Friday also completed the sale of its entire 44.56% interest in Draugen field and 12% interest in Gjoa in Norway to OKEA.
As MRC wrote before, in October 2018, Royal Dutch Shell agreed a USD1.9bn deal to sell its Danish upstream oil and gas assets to Norwegian Energy Company ASA (Noreco).
Earlier, in March 2016, in March 2016, Royal Dutch Shell Plc began lining up assets for a USD30 billion divestment program that might be extend from the US and Trinidad to India following its record takeover of BG Group Plc.
Royal Dutch Shell, commonly known as Shell, is an Anglo–Dutch multinational oil and gas company headquartered in the Netherlands and incorporated in the United Kingdom.Created by the merger of Royal Dutch Petroleum and UK-based Shell Transport & Trading, it is the fourth largest company in the world as of 2014, in terms of revenue, and one of the six oil and gas "supermajors".
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