OIL giant Shell is exiting the upstream exploration and production business in Ireland and is selling its 45 per cent stake in the Corrib gas venture for $1.23 billion (£955.8 million).

The company said it would sell its shares to an offshoot of the Canada Pension Plan Investment Board (CPPIB) in a deal that includes an initial consideration of $947m (£736m) and additional payments of up to $285m (£221m) between 2018-2025, subject to gas price and production.

CPPIB is Canada’s biggest public pension fund, and Vermilion Energy will become the new operator of the gas field off the north-west coast of Ireland.

The Anglo-Dutch multinational is on track to sell assets of about $30bn (£23bn) by 2018 to cut debt following its $54bn (£41bn) acquisition of BG Group.

Shell has also been working to mitigate climate change risks that have upset some of its investors.

Corrib was discovered in 1996 and its development has faced protests since 2005 by residents who were concerned that laying a high-pressure pipeline to bring gas onshore could pollute their water supply.

Shell said the deal – which is subject to partner and regulatory approval – is expected to complete in the second quarter of next year.

The company said its share of the Corrib gas venture’s production represented approximately 27,000 barrels of oil equivalent per day in 2016.

Shell Energy Europe Ltd has signed an agreement to take around 40 per cent of the Corrib gas venture’s production for up to three years following completion of the deal.

Shell’s upstream director Andy Brown said: “This transaction is part of our strategy to reshape Shell and to deliver a world-class investment case. It demonstrates the strong momentum behind our three-year $30bn divestment programme.

“At the halfway point, we have now announced deals valued at more than $20bn.

“This transaction is consistent with Shell’s strategy to concentrate our upstream footprint where we can add most value.

“I’m confident that Corrib will continue to deliver energy successfully to the people and businesses of Ireland.”

Shell’s country chair in Ireland Ronan Deasy added: “Shell is very proud to have led the development of the Corrib gas field.

“Since coming on-stream, the field and facilities have delivered exceptional performance.

“I would like to pay tribute to all those who have contributed to the development of this important energy project.

“In particular, I wish to acknowledge our staff, stakeholders and the local community who have worked closely with us over the years.

“With our existing staff remaining with the asset, CPPIB as a partner and Vermilion as the operator will be well placed to successfully own and manage Corrib.”

Shell said the transaction would result in an impairment charge of around $350m (£271m), which will be taken in Q2 2017.

The company will retain a presence in Ireland through its aviation joint venture, Shell and Topaz Aviation Ireland Limited, which is based near Dublin airport.

Meanwhile, Shell has also announced it is spending $1bn (£775m) to exercise a purchase option on the floating production storage and offloading vessel Turritella, which is connected to the world’s deepest oil and gas project in the Gulf of Mexico, the Stones development.

The FPSO connects to subsea infrastructure which produces oil and gas from reservoirs nearly 30,000 feet below sea level.

The Stones development is located in around 9500ft of water.