Energy giant Royal Dutch Shell has announced its exit from the proposed development of Cambo oilfield off the Shetland Islands, a project which has been blighted by climate protests.
Shell, which has a 30 percent interest in the development off the western coast of Scotland, said late Thursday that the investment case was simply “not strong enough”. “Before taking investment decisions on any project we conduct detailed assessments to ensure the best returns for the business and our shareholders,” a Shell spokesperson said.
“After comprehensive screening of the proposed Cambo development, 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.” Privately-owned Siccar Energy, which holds the remaining 70-percent stake in Cambo, said it was “disappointed” at the decision.
Cambo, which is still awaiting the green light from the UK government, has faced opposition from environmental campaigners and also from Scotland’s First Minister Nicola Sturgeon. Greenpeace said Thursday that Shell’s decision should mark the death knell for Cambo, which contains the equivalent of more than 800 million barrels of oil.
“This really should be the death blow for Cambo,” said Philip Evans at Greenpeace UK. “The truth is rejecting the permit is the only practical option. Anything else would be a disaster for our climate and would leave the UK consumer vulnerable to volatile fossil fuel markets.” Oxfam also applauded the news but stressed that more needed to be done. “Shell has finally realised the economic case for drilling new oil at Cambo when the world is already burning simply does not stack up,” said Oxfam Scotland chief Jamie Livingstone.
“This is a positive step but not the end of the road,” he added, urging the UK government to “do the right thing” and veto production at Cambo and other oil fields. Britain, which last month hosted the COP26 climate change summit in Glasgow, has committed to become carbon-neutral by 2050.
The COP26 urged nations in November to accelerate efforts to “phase out” inefficient fossil fuel subsidies and “phase down” unfiltered coal. Meanwhile, this week’s news comes after Shell announced plans in November to switch headquarters from the Netherlands to the UK and drop Royal Dutch from its name, in a major shakeup that angered the Dutch government.