Plans for controversial Cambo oil field put on ‘pause’
Developer Siccar Point Energy confirms it is ‘pausing’ the project after Shell concludes economic case is not strong enough
Controversial plans to develop a major new oil field off the coast of Shetland have reportedly been shelved, following oil and gas giant Shell’s decision last week to pull out of the project.
Shell last week announced it would be not be proceeding with its investment in the project, concluding that “the economic case for investment is not strong enough”.
Shell held a 30 per cent stake in the project and this morning the lead developer, Siccar Point Energy, confirmed it would pause the project while it reviews its options.
Siccar Point Energy chief executive officer Jonathan Roger told BBC Scotland that the company was “pausing the development while we evaluate next steps”.
However, he stressed the project had not been axed. “We continue to believe Cambo is a robust project that can play an important part of the UK’s energy security providing homegrown energy supply and reducing carbon intensive imports, whilst supporting a just transition,” he said.
It remains unclear as to whether the private equity-backed Siccar Point Energy will be able to attract additional investors to support a project that Shell has concluded is not sufficiently economically attractive and which is facing fierce opposition from environmental groups and some politicians.
Last month, Scottish First Minister Nicola Sturgeon dealt a further blow to the project when she declared it “should not get the green light” given the UK’s climate goals. Meanwhile, a recent analysis from the Carbon Tracker think tank argued the project would prove uneconomic in a world that decarbonises in line with the goals of the Paris Agreement.
However, the UK government has repeatedly argued that new projects in the North Sea can be made compatible with the UK’s net zero goals, likely through the use of hydrogen and carbon capture technologies. As such, new projects are expected to face a climate test, but environmental campaigners have argued that Ministers are yet to adequately define how such a test would work, raising fears that it could enable a new generation of high carbon infrastructure at a time when the UK is meant to be decarbonising.
