The company said its decision was based on the economics of the project and the risk of delays, and that it remained committed to its oil and gas operations in the North Sea.
Shell had a 30% stake in the oil field, while Siccar Point controls the rest of the company. His future is now uncertain.
“After a thorough review of Cambo’s development project, we concluded that the economic case for investing in this project was not strong enough at this time, and that there was a potential for delays,” a Shell spokesperson said in a statement to CNN Business. Friday.
But the company has made it clear that it plans to continue investing in oil and gas in the UK, saying this is “critical to the country’s energy security.”
“We believe that the North Sea – and Shell within it – have a critical role to play in the UK’s energy mix, supporting jobs and skills to enable a smooth transition to the low-carbon future of Great Britain.”
The International Energy Agency said in a recent report that investment in new fossil fuel infrastructure should stop immediately if the world is to have a good chance of achieving net zero emissions by 2050. Net zero is a state where the world emits so little greenhouse gases. as possible, and removes or compensates for anything that it cannot prevent from entering the atmosphere.
Scientists say the world must reach net zero by mid-century to contain global warming to critical 1.5 degrees Celsius above pre-industrial levels.
Prior to Thursday, Shell had expressed frustration at the lack of clarity in the UK government’s policy direction. In October, a British regulator blocked Shell’s plans to develop the Jackdaw gas field in the North Sea on environmental grounds.
“Shell’s admission that Cambo’s economy is ‘not strong enough’ is the latest evidence that new fossil fuel projects are getting harder as the world tackles the root causes of change climate, “said Simon Cran-McGreehin, head of analysis at Shell’s Energy and Climate Intelligence Unit, told CNN Business.
He added that when Shell announced its withdrawal from the Cambo project on Thursday evening, Britain’s offshore wind industry announced two new turbine factories, which would provide jobs and regenerate Scottish ports abandoned by the fossil fuel industry.
âTogether, they highlight the challenge for policymakers to develop new forms of clean energy while ensuring a just transition from fossil fuels for people who work in these sectors. “
Cambo operator will try to move forward
Like many fossil fuel producers, Shell is driven by campaigning, political pressure and litigation to rapidly decarbonize its business and make a faster transition to renewable energy sources.
Jonathan Roger, CEO of Siccar Point Energy, said his company was “disappointed with Shell’s change of stance” but remained confident in the merits of the Cambo project, highlighting its potential to directly create more than 1,000 jobs , and thousands more indirectly.
He said oil production at Cambo would help the UK source oil more responsibly than becoming more dependent on higher carbon imports.
“We will continue to engage with the UK government and stakeholders at large on the future development of Cambo,” he said.