The Press and Journal (Aberdeen and Aberdeenshire)
‘Death blow’ to oil and gas exploration
Shell abandons part in hugely controversial Cambo oilfield
CAMPAIGNERS have claimed a “death blow” to the controversial Cambo oilfield in the West of Shetland after Shell last night delivered the bombshell it has decided to pull out of the project.
The announcement by the oil giant has plunged the future of oil exploration in the region into doubt.
Shell, which holds a 30% stake, said “the economic case for investment in this project is not strong enough” and also cited the potential for delays.
The move has been hailed by environmental campaigners who used Cambo – which could support hundreds of jobs – as a key climate battleground during the COP26 summit in Glasgow.
Friends of the Earth said: “This marks the beginning of the end for all new oil and gas projects.”
But Aberdeen and Grampian Chamber of Commerce chief executive Russell Borthwick said oil and gas still has a critical role to play in the nation’s future energy supply and highlighted a “clear desire” by Siccar Point Energy, the development’s majority stakeholder, to see the project delivered.
Campaigners have claimed a “death blow” to the Cambo oilfield in the West of Shetland after Shell decided not to progress the project.
The oil giant, which had said it stood in firm support of Cambo in October, has decided not to move it to an investment decision, leaving questions over its future for operator and partner Siccar Point Energy.
It comes as the industry has been holding its breath for approval of Cambo from the Oil and Gas Authority (OGA), then allowing for a key final investment decision being made by the operating partners.
Shell, which holds a 30% stake, said its reasons were because “the economic case for investment in this project is not strong enough”, as well as the potential for delays.
However the move will likely be seen as a victory for environmental campaigners, who used Cambo as a key climate battleground in the run up to and during the COP26 summit in Glasgow, arguing that it was not compatible with Scottish and UK environmental goals.
Shell’s move casts doubt over whether the project would be able to proceed, even with OGA approval. The OGA declined to comment last night.
The other 70% of Cambo is held by operator Siccar Point Energy, which said it was “disappointed by Shell’s change of position”.
In a statement, Siccar Point Energy chief executive Jonathan Roger said: “We will continue to engage with the UK Government and wider stakeholders on the future development of Cambo.
“Cambo remains critical to the UK’s energy security and economy.
“While we are disappointed at Shell’s change of position, we remain confident about the qualities of a project that will not only create over 1,000 direct jobs as well as thousands more in the supply chain, but also help ease the UK’s transition to a low carbon future through responsibly produced domestic oil instead of becoming even more dependent on imports, with a relatively higher carbon intensity.”
The west of Shetland project is in the first phase targeting 175 million barrels, but subsequent phases would go after additional resources.
A Shell spokesperson said: “After comprehensive screening of the proposed Cambo development, we have concluded the economic case for investment in this project is not strong enough at this time, as well as having the potential for delays.”
Cambo has been at the epicentre of debate about the North Sea for months.
Many want to see the field axed entirely, believing it to be incompatible with the UK’s net zero ambitions and wider concerns about climate change.
A letter signed by 80,000 people calling for the project to be blocked was dropped off at 10 Downing Street in the summer.
First Minister Nicola Sturgeon said just last month that Cambo should not be given the green light, prompting the UK Government to say oil couldn’t be turned off “overnight”.
Her comments were also met with a backlash from within her own party.
Fergus Mutch, the SNP’s former communications chief, said halting the project would lead to “unemployment and more imported oil for decades”.
Shell’s decision will be seen as a monumental win for many environmental groups.
Tessa Khan, director of Uplift, which is co-ordinating the Stop Cambo campaign, said last night: “This is the end for Cambo. Shell has seen the writing on the wall.
“Its statement makes it clear that the economics are against new oil and gas developments. But the widespread public and political pressure is what’s made Cambo untenable.
“There is now broad understanding that there can be no new oil and gas projects anywhere if we’re going to maintain a safe climate.”
Friends of the Earth Scotland’s climate and energy campaigner Caroline Rance added: “People power has made the climate-wrecking Cambo development so toxic that even oil giant Shell doesn’t want to be associated with it any more.”