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Shell announced on Thursday that it would no longer proceed with its investment in the Cambo oil field.
Shell had a 30% stake in the Cambo oilfield, in the UK’s North Sea, with Siccar Point Energy holding the remaining 70% stake.
Siccar expressed its disappointment in Shell’s exit, and said it would need to review its options for Cambo.
For Shell, the reason to exit the project was the potential for delay as well as a lack of strength of economics.
Cambo was estimated to be capable of producing 175 million barrels of oil in its first phase. Cambo has drawn the attention of environmental groups protesting its development.
“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 spokesman said on Thrusday.
Nevertheless, Shell said that continued investment in the UK oil and gas sector “remains critical to the country’s energy security”, stressing that it still believes in the UK North Sea.
Anti-Cambo development campaigners have hailed Shell’s move as the “beginning of the end for all new oil and gas projects,” one such campaigner from Friends of the Earth Scotland said.
Oil and Gas regulator OGUK warned that the UK would still rely on new oil and gas projects.
“This is a commercial decision between partners but doesn’t change the facts that the UK will continue to need new oil and gas projects if we are to protect security of supply, avoid increasing reliance on imports and support jobs,” Jenny Stanning, external relations director at OGUK said.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.