The €2.4 billion cost overrun is largely as a consequence of opposition to the project, which was stimulated in part by poor management of it at its outset.
Peter Murtagh: Tuesday 30 June 2015
The huge cost overrun on Corrib gas, the single most expensive energy infrastructure project in Ireland and the largest since the Ardnacrusha hydroelectric scheme on the Shannon in the 1920s, will deprive the Government of an estimated €600 million in tax revenue.
The €600 million represents 25 per cent of the project’s likely cost overrun of €2.4 billion, much of which was incurred because of changes made to the project since it began.
Had this additional €2.4 billion not been spent on development costs, an extra €600 million would have been paid to the exchequer as tax on profit, which for exploration companies is levied at 25 per cent. However, like all companies, Shell Exploration and Production Ireland, which is a partner with Statoil of Norway and Vermilion Energy of Canada, can write off capital development costs against taxation.