Shell pull out of plans to invest in controversial Cambo oil project

The Cambo oil development has been thrown into doubt as energy giant Shell has pulled out of plans to invest in the project.

Shell say the economic case for the development off the coast of Shetland is "not strong enough at this time."

The company had a 30% stake in the project, which is awaiting approval from UK authorities.

"Cambo remains critical to UK economy"

The project has been at the centre of a political debate as to whether the UK should be investing in fossil fuels.

Private equity-backed Siccar Point, which owns a 70% majority stake in the field, confirmed in a separate statement that "Shell has taken the decision to not progress its investment at this stage."

Siccar Point Chief Executive Officer Jonathan Roger said: "Cambo remains critical to the UK's energy security and economy.

"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.

"Whilst we are disappointed at Shell’s change of position, we will continue to engage with the UK Government and wider stakeholders on the future development of Cambo.

Shell say they took a "comprehensive screening" of the development before making a decision.

A spokesperson said: "Before taking investment decisions on any project we conduct detailed assessments to ensure the best returns for the business and our shareholders.

"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.

"However, continued investment in oil and gas in the UK remains critical to the country’s energy security. As Shell works to help accelerate the transition to low-carbon energy, we remain committed to supplying UK customers with the fuels they still rely on, including oil and gas.

"We believe the North Sea – and Shell in it – have a critical role to play in the UK’s energy mix, supporting the jobs and skills to enable a smooth transition to Britain’s low-carbon future."

"The beginning of the end for all new oil and gas projects" - Friends of the Earth

Friends of the Earth Scotland have welcomed the news.

Climate and Energy Campaigner Caroline Rance said: "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.

"Shell could see what way the wind was blowing with the project facing fierce opposition, and costly delays, from the public, climate groups and politicians.

"This marks the beginning of the end for all new oil and gas projects.

"Both the UK and Scottish Governments must now officially reject Cambo, say no to any future oil and gas developments in UK waters and get on with planning a fair and fast transition for people working in this industry."

Net Zero Transformation

The Scottish Government reiterated their commitment to a "just transition."

A spokesperson said: "We have said previously that unlimited extraction of fossil fuels is not consistent with our climate obligations and we continue to call on the UK Government, who have the power to act in this instance, to urgently re-assess all approved oil licenses where drilling has not yet commenced against our climate commitments.

"A just transition must be delivered across all of our communities, including those that have a dependency on oil and gas.

"That is why we are undertaking a programme of work and analysis to better understand Scotland’s energy requirements as we transition to net zero, ensuring an approach that supports and protects our energy security and our highly skilled workforce whilst meeting our climate obligations.

"We are already investing in the sector’s net zero transformation.

"Our £500 million Just Transition Fund – which we have called on the UK Government multiple times to match - will support the north east and Moray as one of Scotland’s centres of excellence for the transition to a net zero economy, with our investment supporting transformation across the region.”

Gas and Oil has "critical role"

A UK Government spokesperson said: "This is a commercial decision that has been taken independently by Shell."

Oil and Gas UK’s external relations director, Jenny Stanning said: "This is a commercial decision between partners but doesn’t change the facts that the UK will continue to need new oil and gas projects if we are to protect security of supply, avoid increasing reliance on imports and support jobs.

"However, we know that to deliver the transition to a lower carbon future, investor confidence remains essential.

"Gas and oil has a critical role to play in the nation’s future energy supply and we will continue to work with governments, industry and politicians of all parties to make this case."