Shell announced its withdrawal from the controversial Cambo oil field project.
The company owns a 30% stake in a development project on the west coast of the Shetland Islands and said it has concluded that the economic justification for the investment is “not strong enough.”
Shell said in a statement: “Before making an investment decision on any project, we will conduct a detailed evaluation to ensure that it brings the best return to the company and our shareholders.
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“After a comprehensive screening of the proposed Cambo development project, we concluded that the current economic justification for investing in the project is insufficient and there may be delays.”
The decision was welcomed by environmental organizations including Greenpeace, which said that the decision should mark a “fatal blow” to Campo.
Philip Evans, an oil activist at Greenpeace in the United Kingdom, said: “As another major player rejects the plan, the government is cutting a figure who is increasingly lonely because they continue to support the oil field.”
Ed Miliband, the shadow secretary of state responsible for climate change and net zero, said the move was “an important moment in the fight against the Cambo oil field.”
“It doesn’t make sense environmentally, and now Shell admits that it makes no sense economically,” he said.
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“Operating fossil fuels as usual will kill our chances of maintaining a high temperature of 1.5 degrees and bring huge risks to investors because it is simply an unsustainable choice.
“Shell has realized that Cambo was the wrong choice. The government has been doing this for a long time.
“The right choice for the UK’s future energy security is to rapidly accelerate the development of renewable alternatives and ensure that we protect the interests of oil and gas workers through a fair transition.
“The UK can lead the world in the global green energy race, and the Labor Party government will make the necessary investments in the transition process to ensure that we protect workers and communities.”
In November, following the end of Cop26 in Glasgow, Scotland’s Chief Minister Nicola Sturgeon expressed his strongest opinion so far on the proposed development. She said: “I don’t think Cambo should be approved. .”
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As people are increasingly worried about the impact of fossil fuels on climate change, she previously urged the British government to re-evaluate these plans.
Siccar Point Energy, a private equity firm with a majority stake in the field, said it was “disappointed with Shell’s changes in position,” but added: “We will continue to engage with the UK government and wider stakeholders on the future development of Cambo.”
Liam Kerr, Secretary of the Shadow Cabinet of the Conservative Party of Scotland in charge of net zero, energy and transportation, said: “Kambo will have huge benefits for our economy, ensuring our domestic oil and gas supply while demand remains high. .
“The industry supports 100,000 Scottish jobs and is critical to the energy transition. Shell’s exit from Cambo is obviously disappointing, but this is a business decision they made.
“Recently, Nicola Sturgeon’s remarks about oil and gas do more harm than good. There is no doubt that this will make it more difficult for energy companies to invest in oil and gas, as well as the skills and skills needed to achieve net zero. technology.”
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Mark Ruskell MSP, energy and climate spokesperson for the Scottish Green Party, said: “Today’s news shows that Scotland is approaching the end of the oil and gas era, and it is time for the government to start planning accordingly.
“For a company like Shell, it is of great significance to publicly declare that it is not economically feasible to extract oil from this location.
“Scotland has the potential to lead Europe in offshore renewable energy, with 25% of continental Europe’s offshore renewable energy potential.
“Therefore, after the announcement, it is clear that the British government must shift its previous support for oil and gas to the industry of the future.
“It is vital to start now to establish a just transition for workers in the energy industry in Scotland. We know that Scotland’s renewable future will create hundreds of thousands of jobs and there is no time to waste.”
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Mark Davey is a reporter for PA Scotland.
