SHELL EP Ireland has hired the Transocean-owned Sedco 711 rig to carry out work on a number of wells in the Corrib gas field 80km (50 miles) off the Mayo coastline.
The rig, which is currently in the North Sea, has been commissioned to carry out “intervention work” at four of the field’s wells from April/May to September.
The rig costs just under $500,000 a day, and another $500,000 to staff – totalling an average of $100 million (€71.5 million) for a season of exploration drilling.
Sedco 711 spent last summer conducting exploration work on a satellite well north of the Corrib gas field, known as Corrib North, which was plugged at the end of the season and declared “dry”.
The rig was also due to conduct maintenance work on Corrib during that period, and the company has made no comment on its reasons for returning.
The Corrib project’s production costs are now running at between €2.5 billion and €3 billion, as the lead developer estimates tunnelling for its new onshore pipeline route will cost about €100 million.
However, the high development costs can be written off against tax, and the field has an industry-estimated value of between €9 billion and €13 billion.
The Campaign for Protection of Resources has predicted that the value of the field could reach €50 billion, and has said it will take “years after production begins” on Corrib for “any revenues to accrue to State coffers”.
The group, which former Green TD Eamon Ryan was initially associated with before he became minister for energy, was formed to lobby for a change to oil and gas licensing conditions in Irish waters. It claims that the development and construction costs, along with costs of research and development, local grants in Erris, compensation to fishermen and public relations, will result in very little of the 25 per cent corporation tax being paid by the Corrib gas developers.
Referring to Statoil’s share in the field, the group’s spokesman Pádraig Campbell says “the irony is that the Norwegian people will benefit to a much larger extent from Statoil’s 36 per cent stake in the Corrib consortium”.
It has called on Fine Gael energy spokesman Leo Varadkar to support the reintroduction of production royalties as an “immediate revenue stream” from Corrib if he is “serious about wanting money from the Corrib field to go to health, education and the Irish economy”.
Last week, Mr Varadkar told The Irish Times that “the sooner the gas is brought ashore, the sooner that money can be used to fund essential services”.
