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Shell pulls out of controversial Cambo project in Scotland

The Washington Post

Shell pulls out of controversial Cambo project in Scotland

By Danica Kirka | AP: 3 Dec 2021 at 10:26 a.m. EST

LONDON — Royal Dutch Shell has pulled out of a controversial plan to develop a new oil field near Scotland’s Shetland Islands, buoying environmentalists’ hopes that the project may be shelved altogether as Britain seeks to combat global warming.

Shell, which had a 30% stake in the Cambo project, said Friday that the decision was based on an assessment of what was best for the company and its shareholders.

The project has faced stiff opposition from groups such as Greenpeace, which argue Britain must stop developing new oil and gas fields if it is serious about reducing carbon emissions. U.K. authorities granted an exploration license for the project in 2001 and the government is now considering whether to authorize commercial operations.

“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 the potential for having delays,” Shell said in a statement. “However, continued investment in oil and gas in the U.K. remains critical to the country’s energy security.”

Siccar Point Energy, Cambo’s controlling partner, said it still planned to move ahead with the project. Developing the field 125 kilometers (78 miles) west of the Shetland Islands will create 1,000 jobs and help ease the U.K.’s transition to a low-carbon economy, Chief Executive Jonathan Roger said in a statement.

“We will continue to engage with the U.K. government and wider stakeholders on the future development of Cambo,” he said.

The Cambo field will produce up to 170 million barrels of oil and 53.5 billion cubic feet of natural gas over 25 years, according to Siccar Point.

Philip Evans, a campaigner at Greenpeace UK, said Shell’s departure from the project should prompt the government to think again.

“With yet another key player turning its back on the scheme, the government is cutting an increasingly lonely figure with their continued support for the oil field,” he said.

Prime Minister Boris Johnson came under pressure to block the Cambo project as he sought to lead the global fight against global warming as host of last month’s UN Climate Conference in Glasgow, Scotland, known as COP26.

The International Energy Agency has said policy makers shouldn’t approve the development of any new oil or natural gas fields if they hope to achieve the UN goal of limiting global temperature increases to 1.5 degrees Celsius over pre-industrial levels. The IEA, whose members include the U.S., U.K. and Japan, advises countries around the world on energy issues.

Shell’s decision on Cambo comes as major economies accelerate the shift toward renewable energy and oil companies plan for the day when demand for fossil fuels fades. CEO Ben van Beurden has made it clear that he intends Shell to remain competitive in this new energy landscape.

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