Nephin Energy records a loss of 59 million euros despite a profit of 14 million euros on gas sales

Corrib field shareholder Nephin Energy made a profit of 14.1 million euros on natural gas sales last year, but low prices and other costs left the group as a whole with a loss of 59 million euros, according to the latest figures.

Nephin Energy Holdings Ltd owns 43.5% of the Corrib field, Ireland’s only natural gas reservoir producer, and has a trading arm, Nephin Energy Ltd (NEL), which sells the fuel in the Irish market.

Accounts show that NEL made a profit of 14.1 million euros last year from the sale of gas. The turnover of the holding company fell 35% to 116.5 million euros in 2020 from 178.75 million euros in 2019, as gas prices fell amid falling gas prices. demand at the height of the Covid-19 pandemic.

Nephin Energy Holdings made a pre-tax profit of 11.6 million euros last year, which is 85% less than the 69.6 million euros in profit generated in 2019.

However, a tax charge of 27.7 million euros and a non-cash charge of 44 million euros related to its hedging activities meant that the activity recorded a loss of 59.3 million euros. for 2020, against a surplus of 77.36 million euros the previous year.

The group paid a dividend of 56.5 million euros to its shareholder, the Canada Pension Plan Investment Board.

Nephin chief executive Tom O’Brien said the numbers reflected a strong performance in a period when gas prices fell to their lowest level in 10 years amid falling demand during the Covid-19.

“Nephin’s business has remained resilient due to the prudent and proactive approach we have taken to hedging and the hard work of our team and our joint venture partners,” he said.

The company supplied up to 40 percent of Ireland’s natural gas needs last year, which current fears of a global fuel shortage should “highlight,” O ‘said. Brien.

Growing demand

Growing demand as countries emerged from the pandemic, combined with the squeeze on Russian monopoly Gazprom on supplies in Europe, pushed up gas prices. Fears of a shortage are growing, especially as the demand for gas increases sharply in winter.

Mr O’Brien argued that with the proper support from the government, Corrib could continue to make a significant contribution to Irish energy security for many years to come.

“Corrib’s existing infrastructure could be used to provide the country with a reliable, low-carbon supply of natural gas relative to foreign imports and, in so doing, reduce Ireland’s dependence on markets. increasingly difficult international energy markets, ”he said.

Reserves at the Corrib field will decline as it continues to supply gas, but several companies hold exploration licenses on nearby areas that could potentially contain other amounts of fuel.

If this were the case, these reserves could be connected to the infrastructure currently used to draw gas from Corrib, thus reducing the cost of operating these fields.

The ban on future exploration for fossil fuels in the climate bill does not apply to existing licenses. However, the offshore oil and gas industry argues that this legislation and conflicting energy policy statements have left companies reluctant to take the risk of investing here.

Nephin figures show that the value of the Corrib gas field and its associated infrastructure fell to 482.1 million euros last year from 626 million euros in 2019.

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