Royal Dutch Shell has pulled out of a controversial oil project near Scotland’s Shetland Islands, saying the project no longer makes economic sense for the company.
The company said on Thursday it had scrapped plans to develop the Cambo North Sea oilfield, which became a lightning rod for climate activists seeking to halt Britain's development of new oil and gas resources.
Following a "comprehensive screening" of the Cambo field, Shell "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 company said in a statement.
Shell had a 30 per cent stake in the Cambo project, which is opposed by environmental groups who say Britain should stop developing new oil and gas fields as part of its efforts to combat global warming.
"This is a small step in the right direction in the fight against fossil fuels," says Scottish environmental scientist and campaigner Mara. "Cambo is wholly unnecessary and it's unacceptable that the government are still considering allowing it to continue.
"How can the UK host COP26 and claim to be a green leader, while facilitating projects like this? We know from the IPCC report that extraction simply has to stop. It's a positive move that Shell has withdrawn though, and shows the power of public pressure and grassroots activism."
Still plans for Cambo to move ahead
Private equity-backed Siccar Point, which owns the remaining 70 per cent of the field, confirmed in a separate statement that "Shell has taken the decision to not progress its investment at this stage."
The Cambo project off the Shetland Isles has been at the centre of a political debate on whether Britain should develop new fossil fuel resources as it seeks to sharply reduce its greenhouse gas emissions in the coming decades.
"Cambo remains critical to the UK's energy security and economy," Siccar Point Chief Executive Officer Jonathan Roger said in a statement.
"Whilst we are disappointed at Shell’s change of position ... we will continue to engage with the UK Government and wider stakeholders on the future development of Cambo," he said.
Roger claims that developing the field 125 kilometres west of the Shetland Islands will create 1,000 jobs and help ease the UK’s transition to a low-carbon economy. However, activists and climate scientists are fiercely opposed to the development - saying it is directly opposed to the UK's climate goals.
Scottish First Minister Nicola Sturgeon has urged the UK government to scrap the project since August when she made her first statement on the controversy.
"I am asking that the UK government agrees to reassess licences already issued but where field development has not yet commenced. That would include the proposed Cambo development," she said at the time.
"Such licences, some of them issued many years ago, should be reassessed in light of the severity of the climate emergency we now face, and against a compatibility checkpoint that is fully aligned with our climate change targets and obligations."