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Corrib Gas Field

Dáil Éireann Debate, Tuesday - 6 November 2018

Tuesday, 6 November 2018

Ceisteanna (839)

Mick Wallace

Ceist:

839. Deputy Mick Wallace asked the Minister for Communications, Climate Action and Environment the reason a company (details supplied) was not registered as a guarantor during its ownership tenure with regard to the Corrib gas field; the reason this oversight was only discovered in January 2018; his views in this regard; if his Department has completed an analysis of the liabilities this oversight may have exposed the State to; and if he will make a statement on the matter. [45417/18]

Amharc ar fhreagra

Freagraí scríofa

The Corrib Petroleum Lease was granted on 15 November 2001 and vests in the Lessees the exclusive right to produce petroleum from the leased area. The Lessees are Shell E&P Ireland Ltd (45% interest and Operatorship), Equinor Energy Ireland Ltd (36.5% interest) and Vermilion Energy Ireland Ltd (18.5% interest). The Lessees are joint and severally liable for their obligations under the Lease and are required to fully indemnify the Minister against any claim arising out of their operations under the Lease.

In addition, the Lessees must also obtain and maintain such insurances as are required by the Minister in relation to their obligations under the Lease.

Furthermore, a guarantee must be given by the ultimate holding company of each Lessee, or such other person approved by the Minister in writing, and must be in place for the duration of the Lease. A guarantor guarantees payment of all moneys which are at any time due, owing or incurred to the Minister by the Lessee pursuant to the Lease. As the liability of each Lessee is joint and several, the Minister can if necessary pursue any one or more of the Lessees in respect of any liability under the Lease and, as a consequence make a demand on all or any guarantee.

During the course of a review of documentation associated with the Lease it came to my Department’s attention that the guarantee in respect of Shell E&P Ireland Ltd is being provided by a subsidiary in the Royal Dutch Shell Group. My Department wrote to Shell E&P Ireland Ltd on 22 January 2018 placing the Lessee on notice of the need to address this matter.

Given the provisions and operation of the Lease in respect of insurance, indemnification, guarantees and joint and several liability, my Department is satisfied that there is sufficient cover provided by the Lessees in respect of potential liabilities associated with the Lease and that the State is not exposed to such potential liabilities.

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