Oil major Royal Dutch Shell has pulled out of its stake in the controversial Cambo oil project in the UK’s North Sea. While the major gave a lack of economic incentive as its reason, the decision comes within broader environmental concerns as the UK has come under fire for progressing its oil and gas industry despite its net-zero targets.
Cambo, situated more than 1,000 metres underwater, is thought to contain some 800 million barrels of oil, with the project’s first phase targeting the recovery of 170 million barrels. Shell, which was set to develop the field alongside fossil fuel explorer Siccar Point, released a statement on the decision on Thursday following a “comprehensive screening” into the project.
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“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,” the group said.
The announcement has been heralded by Greenpeace as a “deathblow” for the project, while Friends of the Earth Scotland tweeted “Cambo is dead” following Shell’s decision.
Philip Evans, oil campaigner at Greenpeace UK, said in a statement: “With yet another key player turning its back on the scheme the government is cutting an increasingly lonely figure with their continued support for the oil field.”
The project has been plagued with backlash since its granting, with activist group ClimateEarth threatening a lawsuit over its development and Scottish First Minister Nicola Sturgeon voicing her opposition to the project, saying it “should not get the green light”. Concerns have been raised given the project’s location within protected marine areas, potentially endangering biodiversity in the area and posing a significant threat of an oil spill. A review from the Environmental Law Alliance Worldwide also warned that the project “could jeopardise hundreds of species over several decades, as well as livelihoods.”
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By GlobalDataDespite Shell’s decision, Siccar, which owns 70% of the project, has said its collaboration with the UK Government on the field’s development will continue unabated.
“Cambo remains critical to the UK’s energy security and economy,” Siccar CEO Jonathan Roger said in a statement. “Whilst 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.”
In its statement, Shell said it was still intending to progress its other projects in the North Sea area.
“Continued investment in oil and gas in the UK remains critical to the country’s energy security,” the company said. “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.”
