Shell reportedly reconsidering decision to pull out of controversial Cambo oilfield development

Shell is reportedly reconsidering its decision to pull out of the controversial Cambo oilfield development in Scotland.

Work on the oilfield – off the coast of Shetland – was halted in December after the energy company decided to withdraw, stating the economic case for investment “was not strong enough”.

However, the price of oil has since risen to more than $100 (£76) a barrel, with fears over the future of Russian oil sending prices soaring.

Sources close to Shell told the BBC that although the company’s official position remains the same, it did note the “economic, political and regulatory environment had changed enormously” in the three months since Shell announced it was pulling out of the project.

In the company’s annual report, it said: “Shell concluded that the economic case for investment in Cambo, considering also the potential for delays, was not strong enough to proceed. Shell continues to work with its co-venturer and the UK government to map out the next steps on Cambo.”

Environmental groups have long opposed the proposed field, warning it would jeopardise hundreds of species in the ocean.

In November, Scotland’s First Minister Nicola Sturgeon said the project should not go ahead.

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Industry body Oil and Gas UK previously said blocking long-planned energy projects like the one in Shetland would risk leaving the UK at the mercy of global energy shortages.

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In December, activists campaigning against the development of the oilfield pointed to a report by the International Energy Agency (IEA) saying that no new oil and gas projects should be developed in order to restrict global warming to 1.5C.

Shell confirmed to Sky News that its position hadn’t changed since it decided in December to withdraw from the oilfield. But the oil major has retained its 30% stake in the project, with Siccar Point Energy holding a 70% stake, a stake which Shell intends to keep, according to Siccar Point’s annual report.

The licence for Cambo expires in nine-day and it is understood the parties will seek an extension from Oil and Gas UK.

According to Siccar Point Energy, it could produce the equivalent of up to 170 million barrels of oil and 53.5 billion cubic feet of gas over 25 years.

Climate Change groups including Greenpeace UK criticised Shell’s possible u-turn, saying: “Shell’s reported flip-flopping on Cambo shows exactly why we need to get off oil and gas and move towards homegrown renewable energy.

“Shell wasn’t interested in pursuing this project when it was a bad look for them, but now they stand to gain billions in the midst of war-time price hikes – they’re interested again.”

Greenpeace added that the oil than can be extracted from the Cambo project site is “not usable in the UK” with Tessa Khan, the director of Uplift adding: “Cambo’s oil is heavy crude. It’s low-grade oil and that is partly why it’s taken 20+ years for anyone to try and extract it.

“The main reason why 80% of North Sea oil is exported is that UK companies sell to a global market to make as much profit as possible and that UK refineries are geared up to use lighter, sweeter oils, which is a legacy of having the original Brent oil.”

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