Former Shell executive Andy Pyle speaking at a recent Corrib Gas press briefing

THE VALUE of the controversial Shell Corrib gas field off the Mayo coast has jumped by almost 40% over the past two years and now stands at just under €13bn, according to industry estimates.

The field, owned by oil firms Shell, Statoil and Marathon, has seen its value rise five-fold since the government issued a production licence for it in November 2001.

Rapid gas prices have seen the field's value rise from an estimated €2.6bn in 2001 to around €12.98bn today, which indicates that the delays to the controversial project may lead to increased profits for its operators.

Although Shell has never officially put a value on the field, it is estimated that it contains around one trillion cubic feet of gas, which equates to around 10 billion therms, the unit in which natural gas is sold on wholesale markets.

In recent weeks, gas prices have been hovering around €1.25 per therm, having averaged just 26c between 2001 and 2003. The value of the field has risen by almost 40% in the past two years alone.

Although Shell refused to comment on the valuation, sources said a portion of this increase would have been eaten up by rising costs. The copper used in the electric cabling at the terminal now costs eight times more than when work started in 2006, and rig costs are at €750,000 a day.

However, NCB analyst Peter Hutton said that while it was likely that current gas prices had spiked, the value of fields was likely to remain historically high.

The new valuation may reignite controversy over the Corrib project, particularly as it could be an underestimate as Statoil is trying to extend the field. It is searching for gas in an area four times the size of the original field and Shell has indicated it will allow Statoil to transport gas onshore using its infrastructure. Any gas found by Statoil will not be taxed under the new tax regime introduced this year, designed to give the state a bigger share of the profits from gas finds, as its licences were issued before this year.