Shell reconsidering decision to exit North Sea oil field
22 March 2022
Oil major Shell is reconsidering its decision to exit the Cambo oil field project near Shetland in the North Sea, according to the BBC. Shell announced in December 2021 that it was pulling out of plans to develop the oil field because the economic case for the project was no longer strong enough. However, Shell continues to hold a 30% stake in Cambo and still hasn't sold its interests despite its announcement last year.
Shell's North Sea Shearwater Platform - Image: Shell/Stuart Conway
The Cambo oil field project, which is located around 75 miles west of Shetland, has been a contentious issue for several years and has been a target for environmentalists who say it would hinder the UK’s efforts to become net zero by 2050.
The price of crude oil has doubled since Shell’s announcement in December, partly due to sanctions on Russian oil following the country’s invasion of Ukraine. Shell also suggested that regulatory delays were also partly behind its decision to exit Cambo, however the BBC reports that the UK government may be willing to fast track investments in domestic fossil fuels in order to reduce its dependence on Russian energy exports.
According to BBC sources that are familiar with the matter, Shell’s official position has not yet changed but it acknowledged the significant political, regulatory, and economic changes that have happened in the last few months.
The oil major re-submitted an application to develop the Jackdaw gas field in the North Sea just last week, after its original submission was turned down by regulators in October 2021. Shell said it has made changes to its planned chemical processes involved in gas extraction in order to meet the requirements set by the regulators.
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