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Shell North Sea boss addresses Cambo controversy at industry gala

© Oil and Gas UKShell Cambo boss
Simon Roddy, senior vice president for Shell's Upstream business in the UK

The North Sea boss of Shell has addressed the controversy surrounding the oil giant’s decision to exit the Cambo oil field in the West of Shetland.

Speaking to an audience of industry leaders at the Oil and Gas UK (OGUK) awards in Aberdeen this week, Simon Roddy described Cambo as the “elephant in the room”.

Shell sent shockwaves across the industry last week when it said it would not proceed with investment in Cambo, citing economic reasons and the potential for delays.

Delivering remarks as part of a speech on the energy transition, Mr Roddy said Cambo was “project specific” but was “not taken in a vacuum”, highlighting the need for a “predictable and supportive environment” for North Sea investment.

It comes amid a backdrop of political stances in recent months on North Sea oil and gas in the UK, with Cambo being a key battleground in the run up to and during COP26 from climate campaigners.

The senior vice president for Shell’s upstream business in the UK began by discussing the industry’s commitment to the energy transition –  saying “we must all act, we are acting, and we must act at pace” – and how it relates to future investment.

However, even moving quickly and with reduced demand in years to come, most forecasts still place the UK as consuming more oil and gas than it produces, meaning there is a choice to be made on whether or not to produce through domestic resources.

We must all act, we are acting, and we must act at pace’

He said the recently-signed North Sea Transition Deal (NSTD) implies domestic production, but the requirement for it needs to be be made “much more explicit” going forward and added that long term support for the North Sea is “critical” for future investment and ensuring the goals of the deal will be reached.

“Do we want remaining oil and gas demand supplied from our own natural resources in the North Sea, or do we want it imported? It really is as simple as that,” he said.

“And imported oil and gas tends to have higher overall emissions, both production and transportation, and be under less regulatory control, does not support Scottish and UK jobs, does not support the Scottish and UK economy, and indeed reduces the security of our national energy supply. This is the real choice that we face. And I suspect that most in this room see it similarly, but we welcome a much wider conversation.

“The development of our natural resources is implicit in the NSTD but it needs to become much more explicit. Much more explicit if we are to ensure a predictable context which is a pre-requisite to long-term investment.

“And that brings me to the elephant in the room: Cambo. Cambo was a decision that was specific and project-related but it was not taken in a vacuum. And a predictable and supportive environment is the key to the future of the North Sea.”

The NSTD commits the industry to aggressive emissions reduction targets of 10% by 2025, 25% by 2027 and 50% by 2030.

Mr Roddy said the goals of the deal could be “undermined” without stronger support for the sector.

He added that energy is “expected” in every day lives but is often taken for granted.

“Even as we move at pace, it just won’t happen overnight, there is no switch that we can flick.

“And as we transition at pace, the ongoing demand for energy needs to be met.  People expect it. It powers homes, businesses, lives.

“We only really notice energy when we don’t have it, as the recent power cuts from Storm Arwen demonstrate, or indeed queues at petrol forecourts in the Autumn demonstrated.”

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