Royal Dutch Shell has withdrawn from the Cambo oil field development, offshore Scotland, citing weak economics of the project at this time.
The oil and gas major holds a 30% non-operating stake in the UK North Sea field. Siccar Point holds the remaining 70% stake in the offshore field which has been facing opposition from various climate activists.
Shell said that following a detailed assessment, it has come to a conclusion that the economics of the Cambo oil field project were not strong enough. Besides, the company revealed that it is concerned about the delays in the project.
A company’s spokesperson was quoted by BBC as saying: “We believe the North Sea – and Shell in it – has a critical role to play in the UK’s energy mix, supporting the jobs and skills to enable a smooth transition to Britain’s low-carbon future.”
Located 125km northwest of the Shetland Islands, the Cambo oil field is estimated to yield up to 170 million barrels of oil equivalent and 53.5 billion cubic feet of gas over 25 years.
Siccar Point said that the project continues to be critical to the British economy and energy security.
Siccar Point CEO Jonathan Roger said: “Whilst we are disappointed at Shell’s change of position, we remain confident about the qualities of a project.
“It will not only create over 1,000 direct jobs as well as thousands more in the supply chain, but also help ease the UK’s transition to a low carbon future through responsibly produced domestic oil instead of becoming even more dependent on imports, with a relatively higher carbon intensity.
“We will continue to engage with the UK Government and wider stakeholders on the future development of Cambo.”
The Cambo oil field was discovered in 2002. A final investment decision (FID) on the field development is due to be taken in the second half of this year.
In a separate development, Shell announced the closing of the previously announced $9.5bn sale of its Permian business in the US to ConocoPhillips. The all-cash deal was announced in September 2021 and has involved an acreage of 2,25,000 net acres in the Delaware Basin.
