Oil major Shell has reached an agreement to sell its shares in Shell E&P Ireland Limited that holds 45% interest in the Corrib gas venture for up to $1.23 billion, the company announced on July 12, 2017.
Shell Overseas Holdings Limited has reached an agreement with CPP Investment Board Europe S.A.R.L., a subsidiary of Canada Pension Plan Investment Board (CPPIB).
The Corrib gas field has a gross plant capacity of approximately 350 million cubic feet of natural gas per day, provides approximately 60% of Ireland’s natural gas consumption and constitutes approximately 95% of Ireland’s gas production.
According to Shell’s statement, 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 2nd quarter of 2018.
CPPIB will be the new Corrib Gas JV partner and Vermilion will become the new operator of the Corrib Gas Venture.
Following the transfer to Vermilion, ownership in Corrib would be as follows: CPPIB would hold a 43.5% non-operated interest; Vermilion would hold a 20% operated interest; Statoil would continue to hold a 36.5% non-operated interest.
«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 3-year $30 billion divestment program. At the half-way point, we have now announced deals valued at more than $20 billion.»
Shell will retain a presence in Ireland only through its aviation joint venture, Shell and Topaz Aviation Ireland Limited based near Dublin airport.