Plans to drill at an oilfield off Shetland have been paused after its biggest financial backer said it “cannot progress” under the current circumstances.
Siccar Point Energy, which owns the other 70 per cent of the field, announced that the Cambo project would be shelved for now after Royal Dutch Shell withdrew its minority investment.
The company had intended to seek new investment to proceed with drilling at Cambo but this morning issued a statement confirming the development was being put on hold.
Jonathan Roger, chief executive officer of Siccar Point Energy, said: “Following Shell’s announcement last week, we are in a position where the Cambo project cannot progress on the originally planned timescale.
“We are pausing the development while we evaluate next steps. We continue to believe Cambo is a robust project that can play an important part of the UK’s energy security providing homegrown energy supply and reducing carbon intensive imports, whilst supporting a just transition.”
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It is understood that discussions are ongoing between Siccar Point and Shell, as well as other stakeholders, as attempts are made to try and plug a 30 per cent funding gap.
Industry sources were unable to give any further information on how long the project is likely to be delayed. The ultimate decision on whether exploitation of the 800 million-barrel field will be permitted to go ahead will be taken by UK authorities.
Reports over the weekend suggested that one of the reasons for Shell’s withdrawal was a lack of enthusiasm in Westminster after Nicola Sturgeon, the first minister, came out against new drilling. Since then, Alister Jack, the Scottish secretary, has said that it was better to develop Cambo than rely on oil for another country.
Liam Kerr, the Scottish Conservative net zero spokesman, also said that a failure to invest in North Sea oil and gas projects would leave Scotland dependent on imports, which would cause greater damage to the environment than domestic drilling.
“The hostile SNP-Green stance on projects like Cambo is making it less attractive for energy companies to invest in Scottish oil and gas,” he said.
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“This announcement from Siccar Point Energy is extremely concerning for the oil and gas industry. It’s clear the shameful, ignorant, anti-business views of this coalition are now not only jeopardising our ability to meet net zero targets but also abandoning thousands of jobs in the sector.”
Mark Ruskell, the Scottish Greens climate spokesman, accused the Tories of scaremongering and called for more jobs to be created in the renewables sector rather than investing in more oil and gas projects.
“It should not come as a surprise that Cambo is looking increasingly unlikely, after Shell withdrew from this reckless proposal,” he said. “We already have far more fossil fuel than we can afford to burn, and the public recognise that to expand further would end any hope of addressing the climate emergency.”
