Shell said to be reconsidering Cambo investment as war in Ukraine sends oil prices soaring

Oil giant Shell is understood to be reconsidering its decision to pull out of the controversial Cambo oilfield after the war in Ukraine pushed oil prices to close to double the level they were at when the company first made its decision.

Shell owns a 30 per cent stake in the field to the west of Shetland, which is thought to contain 800 million barrels of oil but which environmental campaigners are opposed to developing on the basis that the focus should be on the transition away from fossil fuels towards cleaner energy sources.

Shell pulled out of the project in December saying that, with oil prices sitting at around $70 a barrel, the economic case for attempting to develop the field was not strong enough.

That decision was seen as the death knell for the project, although majority stakeholder Siccar Point Energy said it would continue to hold talks with the UK Government — which awarded an exploration licence for the project two decades ago — about the future of the field.

Oil prices have risen to over $100 a barrel since December, with global pressure to reduce reliance on Russian oil in the wake of that country’s invasion of Ukraine leading to volatility in global markets.

According to reports, that, and the fact the UK Government is expected to fast track investment in fossil fuels as part of a new energy strategy designed to alleviate the cost-of-living crisis, has prompted Shell — which did not sell its stake in Cambo — to reconsider.

Mark Ruskell, energy and climate spokesman for the Scottish Greens, said investing to bring Cambo into production “certainly wouldn’t help with soaring energy bills or our energy security” and noted that “any U-turn from Shell would be based purely on maximising its already eye-watering profits”.

“The fact is most crude oil extracted from this site would be exported so it would have little impact on energy security and a be massive blow to the transition away from fossil fuels,” he said.

Environmental campaigners against the oil field have also hit out at suggestions that bringing Cambo onstream would help alleviate the cost-of-living crisis in the UK.

Doug Parr, chief scientist at Greenpeace UK, wrote on Twitter that any oil extracted from the field would not go directly to the UK market but would instead be sold to the highest bidder.

“In case anyone is feeling reassured that there could be more 'UK oil' from Shell reconsidering exploiting Cambo oil field, your reminder that once it's out of the ground it'll be Shell's oil, not UK's, and it'll go to whoever pays for it,” he said.

Richard Dixon, director of Friends of the Earth Scotland, added that if Shell is considering a U-turn on its earlier decision on Cambo it would be a mark of “naked opportunism” from the oil giant.