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Controversial Cambo oil and gas field licence extended as UK backs domestic supply over Russian fossil fuels

The licence for the controversial Cambo oil and gas field in the UK’s North Sea has been extended for a further two years. 

The field, which is co-owned by Shell and Siccar Point Energy, attracted significant opposition from campaigners while the government regulator considered whether or not to grant a final permit to drill last year.

In December 2021 Shell backed away from the project before any decision was made, citing the potential for delays and a weak economic case for investment.

Since then, the scramble to get off Russian fossil fuels due to the Ukraine war has changed the landscape for the oil and gas industry, and the UK government has signalled that backing domestic extraction will be a part of a new energy security supply strategy.

In a statement, a Shell spokesperson told Sky News: “The North Sea Transition Authority has awarded Siccar Point Energy and Shell UK an extension to the underlying licences containing the Cambo field which were due to expire tomorrow (31 March 2022).

“At this time there is no change to our position of December 2021, but the extension to the licences will allow time to evaluate all potential future options for the project.”

‘Blindingly obvious’

Tessa Khan, director of anti-fossil fuel campaigning group Uplift, said it was “blindingly obvious that there is no public case for Cambo,” as it would not lower fuel bills or secure supply.

The UK gets just 5-6% of its gas imports from Russia, according to analysis of government data by think tank ECIU.

Much of Britain’s gas comes from the North Sea and Norway, but prices are still set by international markets.

Any gas newly extracted domestically would belong to the company who produced it, and be sold on international markets to the highest bidder.

In February, the government’s independent advisers the Climate Change Committee said increased North Sea extraction was unlikely to “materially affect global oil or gas prices, as the UK energy market is highly connected to international markets and the potential supply relatively small”.

Further extraction would “make it harder to stay within safe climate limits,” added Ms Khan.

“New oil and gas fields offer no solution to the UK’s energy problems. That the government is still encouraging them is a scandal,” she said.

Pushing ahead with the government’s electric heat pump plans and accelerating home insulation rates would cut gas demand quicker than proposed expansion of drilling in the North Sea, according to ECIU analysis.

Ownership of the field is 30% Shell and 70% Siccar Point.

According to Siccar Point, the field could produce up to 170 million barrels of oil equivalent and 53.5 billion cubic feet of gas over 25 years.

Friends of the Earth Scotland said the two-year licence extension was “simply dragging out the inevitable rejection of Cambo”.

The group’s Caroline Rance said: “There is no safe future for new oil and gas production in the North Sea, Cambo and all new field developments must be rejected.”

The Stop Cambo campaign group added: “Cambo was a bad idea in 2021. It’s a terrible idea now. Cambo won’t lower bills but it does put us on a path to wreck the climate.”

Watch the Daily Climate Show at 8.30pm Monday to Friday on Sky News, the Sky News website and app, on YouTube and Twitter.

The show investigates how global warming is changing our landscape and highlights solutions to the crisis.

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