Shell reconsiders Cambo oil project after sharp rise in crude prices

The firm originally made the decision not to go ahead with the project in December, after concluding that the economic case for investment in the site off the coast of Shetland was “not strong enough.” The price of a barrel of oil was only $70 (£52) at the time but has since reached highs almost double that.

According to the BBC, Shell is now reconsidering its position especially in light of the UK government’s recent decision to fast track extraction projects as part of a drive to reduce Europe’s reliance on Russian oil.

Earlier this month, the government committed the UK to phasing out the import of Russian oil in response to the invasion of Ukraine while stepping-up local fracking production.

Writing in the Daily Telegraph, Prime Minister Boris Johnson said it is “crazy” that the UK is importing oil and gas from Russia “when we have our own resources in the North Sea.”

The North Sea’s reserves are currently privatised; any oil that is produced is priced according to global markets and therefore does not contribute to the UK’s energy security. Johnson didn’t elaborate on how future oil projects could change this.

The BBC said that Shell has not yet sold its interests in the field and that sources close to the matter have revealed that while the company has not altered its official position, significant changes to the economic, political and regulatory environment in the last three months had caused it to reconsider.

The possible reopening the project was criticised by environmental campaigners Greenpeace.

Philip Evans, oil and gas transition campaigner for Greenpeace UK, said: “The type of oil that can be extracted from Cambo is not usable in the UK, so this project will do nothing to tackle high bills or shore up energy security.

“Shell’s reported flip-flopping on Cambo shows exactly why we need to get off oil and gas and move towards homegrown renewable energy.

“Shell wasn’t interested in pursuing this project when it was a bad look for them, but now they stand to gain billions in the midst of war-time price hikes - they’re interested again. Meanwhile our bills soar, and offshore workers are trapped in a volatile industry.

“The UK and North Sea communities deserve better. With the Spring Statement and a new energy strategy coming up, the government must throw its weight behind British renewables, a proper home insulation scheme and heat-pump roll-out, or our energy policy will be disrupted by the whims of fossil fuel giants for decades.”

In August, Scottish First Minister Nicola Sturgeon voiced caution over plans to exploit the Cambo oil fields and asked Johnson to “reassess” the licence for the proposed project.