EurOil: Cambo up in the air

Royal Dutch Shell has withdrawn from the large Cambo oil development in UK waters west of the Shetland Islands, in what environmentalists are welcoming as a death blow for the project, which has faced unprecedented scrutiny over its climate impact.

Cambo is one of the largest untapped fields remaining on the UK Continental Shelf (UKCS), and Siccar Point hopes to recover as much as 175mn barrels of oil and some 1.5bn cubic metres of gas from its first stage of development. But the project has been the subject of a sustained campaign by environmentalists, which have called on the UK to refrain from any further oil and gas development.

Shell, which farmed into the project operated by Siccar Point Energy in 2018, said it was pulling out because of weak economics, as well as the potential for delays.

“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,” a Shell spokesperson said in a statement on December 3.

While Shell did not mention environmental concerns, these were likely a key consideration. The project partners have been waiting on the UK government to approve development plans since the summer. And while UK Prime Minister Boris Johnson has suggested the project should go ahead, arguing in August that “we can’t just tear up contracts,” Shell’s departure comes just weeks after Scottish First Minister Nicola Sturgeon said that Cambo should not get the green light.

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