According to sources in the industry speaking to Reuters, Shell has initiated the process to sell its 30% stake in the North Sea Cambo oil field.
The Cambo field in the West of Shetland pipeline area is the UK North Sea’s second largest undeveloped resource, but plans to develop it have attracted criticism from green campaigners, who argue that new fossil fuel developments need to be avoided to limit global warming. Shell abandoned its development plans last year, citing a poor economic case for it, but high energy prices and more favourable UK Government policy triggered speculation that it may reconsider the decision.
Nevertheless, Shell CEO Ben van Beurden recently said these changes had not affected Shell’s fundamental position on the field:
“Our position on Cambo hasn’t changed. We can’t see that being developed with us in there, the economics are simply not supportive enough. Of course, we are looking at a slightly better environment at the moment. But it is a long-term project, scope for delays and everything else will remain.”
Shell has reportedly commissioned Jefferies, an investment bank, to manage the sale of its stake in Cambo. According to Reuter’s sources, any buyer will likely be interested in developing Cambo, so the sale should open the way to proceeding with development efforts. Ithaca Energy, which owns the other 70% of the field, has stated that it believes the prospect is economically viable. The company’s chairman has said that over its 25-year lifespan, up to 170 million barrels of oil could be produced at the field.