Shell is rethinking its decision to withdraw investment from a big new UK oil field, according to news outlets.
Shell said in December that it was withdrawing from the Cambo oil field, which is 75 miles off the west coast of Shetland, due to the economic case and potential regulatory delays.
The price of crude oil was under $70 per barrel at the time.
It has subsequently doubled in price and has remained continuously over $100.
Fears that Russian oil may be ignored or cut off are causing oil prices to fluctuate.
The UK government is ready to accelerate investment in indigenous fossil fuels in order to minimize European reliance on Russian exports.
Shell hasn’t sold its stake in the field yet. According to sources familiar with the situation, while the company’s official position has not altered, it has acknowledged that the economic, political, and regulatory landscape has changed dramatically since the decision was made just three months ago.
Shell resubmitted a proposal to develop the Jackdaw North Sea gas field, which is located off the east coast of Scotland, after it was rejected by environmental authorities in October.
To comply with legal regulations, the business stated it has adjusted the chemical processes involved in the gas extraction.
The UK government stated that investment choices are a business concern for the firms involved, but that it remains committed to the domestic offshore oil and gas sector as the country strives to achieve net zero greenhouse gas emissions.
The North Sea regulator in the United Kingdom intends to host the first oil and gas licensing cycle for new fields since 2020 later this year.
Shell’s decision to abandon the project in December, two weeks after COP26, a high-profile global climate summit in Glasgow, was widely applauded by environmental activists, who hailed it as a “hammer blow” to the project.
New oil and gas assets, such as Cambo, according to Tessa Khan, director of environmental organisation Uplift, would neither help lower costs or ensure UK energy security of supply.
“This isn’t ‘our oil,’ contrary to what [Business Secretary] Kwasi Kwarteng has declared,” she remarked.
“It belongs to Shell, who will sell it to the highest bidder from outside the country.” According to government estimates, 80% of North Sea oil is loaded into ships and exported.
“What it will do is create 18 coal-fired power plants’ worth of carbon emissions at a time when we are already feeling the effects of the climate catastrophe.” Cambo is as illogical now as it was last year.”
Early next week, the government will reveal its energy supply strategy.