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Released December 14, 2021 | GALWAY, IRELAND
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GALWAY, IRELAND--December 14, 2021--Written by Martin Lynch, European News
Editor for Industrial Info (Galway, Ireland)--Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands) has pulled out of the controversial Cambo oilfield development project off the Shetland Islands, off the north coast of Scotland.
The company stated: "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." The Cambo project, worth more than half a billion dollars in potential investment, is jointly owned by Shell (30%) and private equity-backed explorer Siccar Point (70%). The future of the project is now in doubt. Industrial Info is tracking five associated Cambo projects--now on hold--worth roughly £430 million (US$570 million).
Located 125 kilometers (km) northwest of the Shetland Islands, it is one of the deepest fields to be discovered in Northern Europe and is located in 1,100 meters of water. Cambo's production capacity for the first phase is estimated at 170 million barrels of oil equivalent (boe) during its 25-year operational life. It would also provide a further 53.5 billion cubic feet of gas-- enough to power 1.5 million homes for a year, according to Siccar Point. The field is believed to contain some 800 million barrels of oil.
"Before taking investment decisions on any project we conduct detailed assessments to ensure the best returns for the business and our shareholders," a Shell spokesperson told The Guardian. "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. However, continued investment in oil and gas in the U.K. remains critical to the country's energy security. As Shell works to help accelerate the transition to low-carbon energy, we remain committed to supplying U.K. customers with the fuels they still rely on, including oil and gas. We believe the North Sea -- and Shell in it -- have a critical role to play in the U.K.'s energy mix."
The project's main backer, Siccar Point, confirmed Shell's withdrawal. "Cambo remains critical to the U.K.'s energy security and economy," commented Jonathan Roger, chief executive officer of Siccar Point Energy. "Whilst we are disappointed at Shell's change of position, we remain confident about the qualities of a project that will not only create over 1,000 direct jobs as well as thousands more in the supply chain, but also help ease the U.K.'s transition to a low carbon future through responsibly produced domestic oil instead of becoming even more dependent on imports, with a relatively higher carbon intensity. We will continue to engage with the U.K. Government and wider stakeholders on the future development of Cambo."
Shell's withdrawal was heralded as a major victory for those who have campaigned over the decades against Cambo, including Greenpeace, Friends of the Earth and, more recently, Scotland's first minister, Nicola Sturgeon, who did not believe the project should proceed and that it should be subjected to a climate assessment.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
The company stated: "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." The Cambo project, worth more than half a billion dollars in potential investment, is jointly owned by Shell (30%) and private equity-backed explorer Siccar Point (70%). The future of the project is now in doubt. Industrial Info is tracking five associated Cambo projects--now on hold--worth roughly £430 million (US$570 million).
Located 125 kilometers (km) northwest of the Shetland Islands, it is one of the deepest fields to be discovered in Northern Europe and is located in 1,100 meters of water. Cambo's production capacity for the first phase is estimated at 170 million barrels of oil equivalent (boe) during its 25-year operational life. It would also provide a further 53.5 billion cubic feet of gas-- enough to power 1.5 million homes for a year, according to Siccar Point. The field is believed to contain some 800 million barrels of oil.
"Before taking investment decisions on any project we conduct detailed assessments to ensure the best returns for the business and our shareholders," a Shell spokesperson told The Guardian. "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. However, continued investment in oil and gas in the U.K. remains critical to the country's energy security. As Shell works to help accelerate the transition to low-carbon energy, we remain committed to supplying U.K. customers with the fuels they still rely on, including oil and gas. We believe the North Sea -- and Shell in it -- have a critical role to play in the U.K.'s energy mix."
The project's main backer, Siccar Point, confirmed Shell's withdrawal. "Cambo remains critical to the U.K.'s energy security and economy," commented Jonathan Roger, chief executive officer of Siccar Point Energy. "Whilst we are disappointed at Shell's change of position, we remain confident about the qualities of a project that will not only create over 1,000 direct jobs as well as thousands more in the supply chain, but also help ease the U.K.'s transition to a low carbon future through responsibly produced domestic oil instead of becoming even more dependent on imports, with a relatively higher carbon intensity. We will continue to engage with the U.K. Government and wider stakeholders on the future development of Cambo."
Shell's withdrawal was heralded as a major victory for those who have campaigned over the decades against Cambo, including Greenpeace, Friends of the Earth and, more recently, Scotland's first minister, Nicola Sturgeon, who did not believe the project should proceed and that it should be subjected to a climate assessment.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
