Climate activists have reacted with concern to reports that Shell is reconsidering its decision to abandon development of the Cambo oilfield, warning that such a reversal would further threaten emissions reductions targets.
The fossil fuel producer could U-turn on a decision to pull out of the North Sea project because the “economic, political and regulatory environment had changed enormously since the decision was announced just three months ago”, according to sources cited by the BBC.
The Brent crude oil price was below $ 70 (£ 53) a barrel in December when Shell announced the long-expected decision on Cambo, but since then prices have surged – reaching $ 116 on Tuesday morning – in part because of concerns Russian supplies could be disrupted or blocked because of its invasion of Ukraine.
The price rise has prompted analysts across the fossil fuel industry to re-examine the economics of projects. Shell is thought to still have its own analysts assigned to the Cambo project, in which it still owns an interest.
However, it is understood that Shell has not formally reconsidered investment in Cambo at its most senior levels, a step that would almost certainly be required given the project’s political sensitivity.
Governments around the world are scrambling to wean themselves off Russian oil and gas in response to the invasion, and Boris Johnson has said the UK should increase its own domestic fossil fuel output, including in the North Sea.
Mark van Baal, the leader of the campaign group Follow This said a decision to develop Cambo would contravene guidance by the International Energy Agency, a respected global body. Last year the IEA said the exploration and development of new oil and gas must stop immediately if the world is to have any chance of limiting global heating to 1.5C, the target set at the 2015 UN climate talks in Paris. Shell has itself pledged to reach net zero emissions by 2050, but has not outlined detailed steps of how it will reduce its fossil fuel output.
“Any new fields will be stranded if we are to meet the Paris climate targets,” van Baal said, adding that Shell’s pledge to reach net zero by 2050 would be “really empty without action this decade”.
“We know this is a response to the Ukraine war,” he said. “The only good response to the Ukraine war is to replace Russian fossil fuels with renewables.”
Follow This has gained the support of a significant minority of large investors for its campaign encouraging shareholders to vote for climate strategies at Shell and other large fossil fuel producers.
The group is again putting forward a resolution for Shell’s annual shareholder meeting calling for it to align with the Paris agreement, along with other big oil companies such as its UK rival BP and its US counterparts ExxonMobil and Chevron.
Philip Evans, the oil and gas transition campaigner for Greenpeace UK, said: “The type of oil that can be extracted from Cambo is not usable in the UK, so this project will do nothing to tackle high bills or shore up energy security.”
Evans suggested “Shell wasn’t interested in pursuing this project when it was a bad look for them”, but if they were to restart Cambo now they would “stand to gain billions in the midst of wartime price hikes”.
Shell has argued that it has reached its targets so far in its plan to hit net zero emissions, but said it should not move faster than society at large in cutting oil use. It has also pointed to its investments in low-emission technologies such as public electric car chargers and hydrogen production.
Shell declined a request to comment on the latest reports.