AN OIL company which had a 30 per cent stake in the Cambo field west of Shetland has pulled out of the divisive project.
Shell said it made its decision because the economic case was “not strong enough” at this point in time.
The news has been welcomed by environmental campaigners who believe the oil development should not go ahead.
But Shell reiterated that “continued investment in oil and gas in the UK remains critical to the country’s energy security”.
The Cambo oil field, located 125 kilometres to the north west of Shetland and driven forward by Siccar Point Energy, had an exploration licence granted in 2001.
Its developer said the project would deliver 170 million barrels of oil equivalent during its 25-year operational life, and provide a further 53.5 billion cubic feet of gas – enough to power 1.5 million homes for a year.
What has caused controversy in recent months is whether the UK Government gives Cambo production the green light.
Against the backdrop of the COP26 climate conference, campaigners say extracting more oil around the UK is not the way forward in the route to net zero.
Responding to the Shell news, Shetland Greens said the “oil and gas industry has no future – our energy security and economic security lies in renewables”.
Friends of the Earth Scotland’s climate and energy campaigner Caroline Rance said: “People power has made the climate-wrecking Cambo development so toxic that even oil giant Shell doesn’t want to be associated with it anymore.
“Shell could see what way the wind was blowing with the project facing fierce opposition, and costly delays, from the public, climate groups and politicians.
“This marks the beginning of the end for all new oil and gas projects.”
Those in favour, however, say if Cambo does not go ahead then oil will likely have to be imported from outside the UK as there will still be a role for the fossil fuel in the energy transition.
Siccar Point Energy CEO Jonathan Roger said the company is now reviewing its options – but he highlighted the job creation associated with Cambo, adding that it will “help ease the UK’s transition to a slow carbon future through responsibility produced domestic oil”.
First minister Nicola Sturgeon said last month, however, that she felt “the presumption would be that Cambo could not and should not pass any rigorous climate assessment”.
But the decision on approving oil developments rests with the UK Government.
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