Development of the Cambo discovery west of the Shetland Islands in the UK North Sea has been put on hold after Shell confirmed it is pulling out of the project.
Development of the Cambo discovery west of the Shetland Islands in the UK North Sea has been put on hold after Shell confirmed it is pulling out of the project.
The project was heavily criticised during the COP26 global summit on climate change in Glasgow, UK, but Shell said the decision was an economic one.
‘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’, said a company statement.
Cambo operator Siccar Point said that it could no longer proceed to the original timescale and was therefore ‘pausing the project’ while it evaluates the next steps.
‘Cambo remains critical to the UK’s energy security and economy,’ Jonathan Roger, chief executive officer of Siccar Point. ‘Whilst we are disappointed at Shell’s change of position, we remain confident about the qualities of a project that will not only create more than 1,000 direct jobs as well as thousands more in the supply chain, but also help to 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,’ Roger added.
‘We will continue to engage with the UK Government and wider stakeholders on the future development of Cambo.’
Cambo would help to reduce the volume of imports required by delivering up to 170 million barrels of oil equivalent during its 25-year operational life, according to Siccar Point. The company also highlighted that the development will be on average 50% lower in emissions from the outset than existing fields ‘thanks to a vast range of measures’.
Last month, industry body Oil & Gas UK warned that if new projects like Cambo are not approved then UK production would plummet with gas output falling up to 75% by 2030.
Shell said that it would continue to invest in offshore UK oil and gas: ’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.’
Located 125 km north-west of the Shetland Islands, the Cambo field was discovered in 2002 and had five wells drilled into the structure. Siccar Point acquired a 100% operated interest in the field from the takeover of OMV in January 2017 and brought Shell UK bought a 30% stake in May 2018.
