Job fears as Shell axes North Sea oil project

THE decision by Shell to drop its plan to drill for oil in the North Sea triggered a backlash yesterday.

The energy giant said it would no longer support the Cambo field – which could produce up to 170million barrels of oil over 25 years.

Green campaigners welcomed the move, but business groups predicted the impact on jobs would be as devastating as shutting coal mines in the 1980s.

Shell had a 30 per cent stake to drill at Cambo, 75 miles west of Shetland, with the remainder held by private equity firm Siccar Point Energy. Regulatory approval was expected in the next few weeks.

Shell emphasised its decision was taken on economic grounds rather than after pressure from the green lobby.

Shell said it ‘concluded the economic case for investment in this project is not strong enough at this time, as well as having the potential for delays’.

It insisted that its North Sea activities still ‘have a critical role to play... to enable a smooth transition to Britain’s low-carbon future’.

But environmentalists say the UK would not be able to meet its commitment to reducing greenhouse gas emissions to ‘net zero’ by 2050 if new fossil fuel projects go ahead.

Scottish Nationalists, who had long believed North Sea oil could pay for independence, had turned against the Cambo field. Patrick Harvie, one of two Green ministers in the Scottish government, said yesterday: ‘New oil and gas extraction is not compatible with a serious response on climate.’

But Andrew Bowie, Conservative MP for West Aberdeenshire and Kincardine, said the decision could ‘affect the lives of thousands of workers’ and was ‘simply a disgrace’.

Russell Borthwick, chief executive of Aberdeen and Grampian Chamber of Commerce, added: ‘If we get this wrong, all of those people and organisations demanding a premature end to domestic oil and gas production might want to be able to reflect back to their role in scripting a repeat of what happened to our mining communities in the 1980s.’

Trade body Oil and Gas UK said domestic supplies were still vital ‘to protect security of supply [and] avoid increasing reliance on imports’ from foreign suppliers such as Russia.

A UK Government spokesman said: ‘This is a commercial decision that has been taken independently by Shell.’

Britain’s only Green MP, Caroline Lucas, said Shell’s withdrawal from Cambo was ‘surely the death knell for this massively misguided project’ and the next task was to stop the other 39 oil and gas projects in the pipeline for the North Sea.

‘Death knell for this project’