Page 4 - EurOil Week 49 2021

EurOil COMMENTARY EurOil

Cambo up in air after Shell exit

Opposing Cambo will mean the UK imports more oil and gas at higher cost and

resulting in increased emissions, the industry warns

UK ROYAL Dutch Shell has withdrawn from the UK government to approve development plans
large Cambo oil development in UK waters west since the summer. And while UK Prime Min-
WHAT: of the Shetland Islands, in what environmental- ister Boris Johnson had suggested the project
Shell has withdrawn from ists are welcoming as a death blow for the project, should go ahead, arguing in August that “we
the UK Cambo oil proect. which has faced unprecedented scrutiny over its can’t just tear up contracts,” Shell’s departure
climate impact. comes just weeks after Scottish First Minister
WHY: Cambo is one of the largest untapped fields Nicola Sturgeon said that Cambo should not get
Environmental pressure remaining on the UK Continental Shelf (UKCS), the green light.
was likely a factor behind and Siccar Point hopes to recover as much as It is the UK government and not the Scot-
the decision. 175mn barrels of oil and some 1.5bn cubic tish one that has the power to approve or block
metres of gas from its first stage of develop- Cambo. But in light of Sturgeon’s words, Shell
WHAT NEXT: ment. But the project has been the subject of a may have understood which way the wind was
Siccar Point now needs to sustained campaign by environmentalists, who blowing.
find a new partner. have called on the UK to refrain from any further “Whilst making a case that it was an eco-
oil and gas development. nomic decision, it does seem more likely to
Shell, which farmed into the project operated many external observers that Shell has bowed to
by Siccar Point Energy in 2018, said it was pull- political and societal pressure, particularly from
ing out because of weak economics, as well as the those who have used the development decision
potential for delays. on Cambo as a watershed moment for the debate
“After comprehensive screening of the pro- in the UK North Sea,” a spokesperson for Edin-
posed Cambo development, we have concluded burgh-based Gneiss Energy said in an emailed
the economic case for investment in this project statement to NewsBase.
is not strong enough at this time, as well as hav- Shell may be keen to avoid further criticism,
ing the potential for delays,” a Shell spokesperson given that it is already facing mounting pres-
said in a statement on December 3. sure from environmentalists, activist investors
While Shell did not mention environmental and courts to do more to address its emissions.
concerns, these were likely a key consideration. Increasingly, oil companies are facing calls not
The project partners have been waiting on the only to address their Scope 1 and 2 emissions,

P4 www. NEWSBASE .com Week 49 09•December•2021