Equinor Exits Ireland
Norwegian operator sells its nonoperated stake in the Corrib gas project
Equinor will sell its nonoperated equity position in the Corrib gas project in Ireland to Vermilion Energy for $434 million. The sale of Corrib results in Equinor no longer having an active business presence in Ireland, after also deciding to withdraw from an early- phase offshore wind project in the country.
The Corrib field started production in 2015 and is located 83 km off Ireland’s northwest coast in water depths of almost 350 m. The equity gas volumes to Equinor for 2021 are estimated at around 58 MMcf/D.
As part of the transaction, Equinor and Vermilion have agreed to hedge approximately 70% of the production for 2022 and 2023 and have also agreed a contingent payment that will be paid on a portion of the revenue if European gas prices exceed a given floor level.
“The Corrib field has been an important nonoperated project for Equinor for several years,” said Arne Gürtner, senior vice president responsible for the UK and Ireland at Equinor. “We have taken the decision to sell the asset to focus our portfolio, in line with our strategy, to capture value from the current strong market and to free up capital that we can re-invest elsewhere.”
According to Vermillion, the deal will add around 23 million BOE of 2P reserves and is expected to produce approximately 7,700 BOE/D in 2022.
The deal is subject to approval by partners, government, and regulatory bodies. The transaction is expected to have an effective date of 1 January 2022.
Following the deal, Vermilion, the operator, will hold 56.5% interest in Corrib. Partner Nephin Energy holds the remaining 43.5% stake.