Regulators have extended the licence for the Cambo oilfield for two years, giving its owners more time to bring it into production.
Siccar Point Energy, which owns 70 per cent of the acreage, had paused work last year after its partner Shell, with 30 per cent, withdrew after a campaign by environmentalists before the Cop26 climate talks in Glasgow.
Nicola Sturgeon, Scottish first minister, was among those who spoke out against the field.
In recent weeks it had been suggested Shell was reconsidering its participation and an application to extend the licence, which was due to run out today, had been submitted.
The UK government is keen to see more North Sea fields going into production to reduce the need to import oil and gas. An industry report published this week said that the UK would be reliant on imports for 70 per cent of its oil and 80 per cent of its gas by 2030 if no new projects were commissioned.
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Yesterday it emerged the North Sea Transition Authority, the industry regulator, had given its approval for the companies working on Cambo to assess the options for two more years.
Aberdeen-based Siccar Point, which has private equity backers, said: “Siccar Point continues to work with its co-venturer Shell and the UK government to map out the next steps on Cambo.”
Shell said that its position had not changed but “the extension to the licenses will allow time to evaluate all potential future options for the project”.
The development of Cambo, which lies off Shetland and was discovered in 2002, is expected to cost about £2 billion.
There are an estimated 800 million barrels of oil in Cambo, though not all of those would be recovered. The first phase of development is expected to target 170 million barrels.
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Caroline Rance, of Friends of the Earth Scotland, said: “The UK government is trying to keep this doomed oilfield on life support but they are simply dragging out the inevitable rejection of Cambo and the transition away from fossil fuels.
“There is no safe future for new oil and gas production in the North Sea. Cambo and all new field developments must be rejected. Shell and Siccar Point Energy have had years to develop the case for opening the Cambo field and have failed.
“Two more years won’t make the project look any better in terms of its devastating climate impacts or the urgency of the transition away from fossil fuels.
“New fields wouldn’t start producing for years and would do absolutely nothing for people’s soaring energy bills.”
