Shell given green light for large North Sea gas field

Jackdaw project receives regulatory approval but climate campaigners are considering legal action

SHELL is to develop one of the biggest North Sea gas projects in years after winning approval from regulators as the Government scrambles to bolster domestic energy supplies.

The FTSE 100 company’s Jackdaw project is set to produce about 6.5pc of Britain’s gas output with Shell aiming to start production by the second half of 2025.

Shell’s plans for the field were initially knocked back by environmental regulators last year, but have been approved after they were revised.

The Government wants to cut the use of fossil fuels in the long term, but is also under pressure to bolster domestic supplies after Russia’s invasion of Ukraine sent international oil and gas markets into turmoil.

Kwasi Kwarteng, the Business Secretary, Tweeted last night: “Jackdaw gas field – originally licensed in 1970 – has received final regulatory approval.

“We’re turbocharging renewables and nuclear, but are also realistic about our energy needs now. Let’s source more of the gas we need from British waters to protect energy security.”

However, climate campaigners criticised the decision. Greenpeace said the approval was “desperate and destructive” and showed the Government had “no long-term plan.” It added it was considering pursuing legal action to stop the project.

Jackdaw’s approval comes a week after the Government dismayed the oil and gas sector by slapping a windfall tax on North Sea profits to help households struggling with household energy bills.

Soaring wholesale gas prices triggered a 54pc jump in energy bills in April and they are set to climb again in October by an estimated 42pc to £2,800 per year on average.

Shell has criticised the levy, saying it creates “uncertainty about the investment climate for North Sea oil and gas for the coming years”.

Shell’s investment decision on Jackdaw is believed to have been taken before the windfall tax, and will not be affected by it. The company said earlier this year it plans to invest between £20bn and £25bn in the UK energy system over the decade.

A Shell spokesman last night welcomed the consent for Jackdaw. It added: “Responsibly produced, local gas production plays an essential role in the UK’S transition to net zero, will support thousands of jobs and forms part of Shell UK’S broader intent to invest £20bn to £25bn in the UK, with 75pc intended for low and zero-carbon products and services. However, as we have repeatedly stated this can only happen with a stable fiscal policy and we continue to look to the Government for those assurances.”

The approval of Jackdaw may encourage Shell to reconsider its involvement in the controversial Cambo oil field west of Shetland.

The company pulled out of the planned field last year, citing a weak economic case, amid rising public and political opposition to the project in the run up to the Cop26 international climate change conference in Glasgow.

The Government has become markedly warmer towards North Sea production over the past few months, however, with oil and gas bosses invited into Downing Street in March to be encouraged to boost production.

The UK plans to ban imports of Russian oil by the end of the year. It gets little gas directly from Russia but there are concerns about a knock-on effect to prices in the UK if Russia goes further in cutting off gas supplies to Europe as the Kremlin’s war on Ukraine continues.

Jackdaw has reserves of between 120m and 250m barrels of oil equivalent.

A government spokesman said: “Sourcing gas in the North Sea makes us less than dependent on foreign imports and produces less than half the carbon footprint of imported gas.”

It added that the oil industry’s environmental regulator had concluded that the project “would not have a significant effect on the environment”.