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Corrib gas field in Ireland, the scandalous project

The Corrib gas field in Ireland has become almost three times more expensive than planned and evoked local hatred against the company. The scandalous project is forgotten in Norway, however. Statoil is aware that the Corrib project has been controversial, but point out that Shell is operator for the development.

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ARTICLES ABOUT STATOIL, SHELL & THE CORRIB GAS PROJECT, PUBLISHED TODAY IN NORWAY

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1st ARTICLE

Statoil in Ireland money quagmire

The Corrib gas field in Ireland has become almost three times more expensive than planned and evoked local hatred against the company. The scandalous project is forgotten in Norway, however.

Erlend Skarsaune: Publisert: Oppdatert:

Statoil was part of a rare gas discovery off the northwestern coast of Ireland in 1996. With its 36.5 percent share in Corrib, the company saw a green future in Ireland. The plan was to start gas production in 2003. It did not work. The scandalous Corrib project disappeared from the annual reports after Statoil referred to Ireland as a focus area in the early 2000’s.

Read the response from Statoil and Shell here:

“Less controversial now”

In Norway, the Irish scandal has completely disappeared off the public sector’s radar.

The Corrib field is more than ten years delayed and nearly three times as expensive as originally planned.

NOK 17 billion overrun

Development was first scheduled to cost some NOK 6 billion (some EUR 796 million). Now, the bill has risen to NOK 23 billion (over EUR 3 billion).

“The oil companies have been so incredibly stupid. I’m almost lost for words. Shell and Statoil could have developed [it] a long time ago if they’d behaved properly and talked to people. But they chose to adopt a hostile line. They showed no mercy,” Monica Muller tells journalists at Aftenbladet’s energy supplement, due for publication, Saturday.

Ms Muller is one of several in the small community of Rossport who has protested vigorously against oil companies’ Shell (45 per cent stake and operator), Statoil (owns 36.5 per cent) and Marathon Oil (18.5 per cent) plans for the Corrib field.

Gas fear

Oil companies chose a solution using a pipeline to a processing plant nine kilometres (some 5.6 miles) inland from the coast when they decided to develop the Corrib field in 2001. An offshore platform was too expensive, the companies said.

But some of the locals were very skeptical. They were concerned about safety when a pipeline with gas under high pressure (designed for 345-Bar) was to be built 70 metres (about 230 feet) from their homes.

Irish authorities gave oil companies the green light in 2002 to lay the gas pipeline across private property without the consent of the landowner. Shortly after, Shell took over as operator of the project.

Gulf

Several events have contributed to ​​the Corrib field becoming a multi-billion kroner financial drain for Statoil and other oil companies. They were first denied an onshore gas processing facility following complaints from locals in 2003. The environmental risk with building a facility of this size in a peaty area was too large, said authorities. The project was already delayed then. Planning permission for the processing facility was given the following year, but the problems had just begun.

Refused to budge

Even though most of the 34 affected landowners agreed to the gas pipeline, there were still six who refused their permission. The matter peaked in June 2005. Five men from Rossport were imprisoned because they failed to comply with a court order giving oil companies the right to lay the pipeline. Nicknamed “The Rossport Five”, they spent 94 days in jail.

Shell had agreed to wait for an independent review of the project and an attempt at mediation with the local community then. The result was both a recommendation to decrease pipeline pressure and finding a new route. Permission from Irish authorities to the modified project was first in place in 2011.

The pipeline is now being laid in a tunnel under Broadhaven Bay to avoid Rossport. Oil companies expect production will be underway in late 2014 or early 2015. Measured as a percentage, the NOK 17 billion overrun is far higher than known Statoil ones in Norway. Corrib’s has become about 280 per cent more expensive, Mongstad 95 per cent, Åsgard 50 per cent, and Snøhvit 47 per cent.

Beaten and jailed

Shell has admitted that mistakes were made in the project’s beginnings, but the relationship with the local population is far better now. The oil company also notes that many in the area are in favour of the project.

Nevertheless, some are still strongly opposed to it. Willie Corduff was one of ‘The Rossport Five’. He believes that no matter what happens, wounds the Corrib project has caused the community will never heal.

“We’ve been beaten and imprisoned. Statoil’s role in this is a disgrace. They never said what has happened has been a mistake,” Mr Corduff says to Aftenbladet energy supplement staff.

Opponents of the development were not reassured by the fact that a worker at the gas processing plant cut a pipeline instead of a water one on 8 April. Gas from the Corrib field is still not coupled to the plant, just nitrogen to prevent corrosion.

SOURCE

2nd ARTICLE

“Less controversial now”

Statoil is aware that the Corrib project has been controversial, but point out that Shell is operator for the development.

Ellen Kongsnes: Publisert: Oppdatert:

Aftenbladet has requested an interview with Statoil CEO Helge Lund about the company’s experiences regarding Ireland, but information manager Bård Glad Pedersen points out that they are not operator of the Corrib field. Mr Lund will not be making a statement, as a result.

Mr Pedersen finds it important to underline that Shell is operator, and is thus ultimately responsible for the development.

“Of course we’ve been following the demonstrations and past actions, and are familiar with that the project has been controversial locally. But it’s grounded in licences issued by the Irish authorities,” says Mr Pedersen.

He points out that the final solution for the Corrib project means that a different route for the gas pipeline on land was chosen to the one originally approved, and this answers local concerns.

Undesired gulf

Was the solution chosen to appease the locals, not because Statoil believes it is safer?

“Irish authorities did not turn down the original solution, but we have been committed to finding solutions that better answer local concerns. This is what the new one does.”

But you do not wish to say whether it is safer?

“There’s no basis for saying that the original solution wasn’t. However, we have focused on finding solutions in dialogue with the local population.”

Mr Pedersen believes that a project being more expensive and delayed is “not desirable”.

“But we’ve put new fields corresponding to 400,000 barrels per day into production since 2011. Overall, delivery is ahead of time and under budget.

Is it a problem for Statoil that the local population in Rossport has reacted so strongly?

“The project is based in the Irish government’s desire to develop the field. But it is not desirable that a project is as controversial as this has been. It’s positive the new route for the pipeline is less controversial than the previous solution.

“Completely sure”

Shell E & P Ireland communications director Denise Horan stressed that the state has regretted the role the company had in the imprisonment of ‘The Rossport Five’ in 2005, but the relationship with the locals is much better now.

Shell believes that the Corrib project has already contributed a lot to the community. Ms Horan notes that it now has 1,100 employees, of which almost 600 are from the region, and that the field will provide fulltime employment for 174 people when in production. Moreover, she points out that the Corrib project has created a lot of business for local subcontractors and accommodation places.

Paid a lot to the community

“We have contributed over EUR 6 million (NOK 45 million) to the local community, voluntary organisations and sports clubs through our investment programme. We also supported 61 local students via a scholarship,” she wrote in an email.

The Corrib project underwent an independent review after the imprisonment of ‘The Rossport Five’ in 2005. Shell notes that the review concluded that the gas pipeline met, and in many cases exceeded all international safety standards. The oil company points out that they still agreed to lower the pressure in the pipeline and find a new route despite this.

SOURCE

RELATED: Irish hope for Norway oil help

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