(Bloomberg) -- Royal Dutch Shell Plc is putting its investment in a controversial North Sea oil field on hold because development of the project isn’t economically viable.
“After comprehensive screening of the proposed Cambo development, we have concluded the economic case for investment in this project is not strong enough at this time, as well as having the potential for delays,” a Shell spokesperson said Thursday in a statement.
Shell’s exit is a big win for environmental groups. The U.K. oil field has been a flash point between the government and environmentalists who say it isn’t consistent with the nation’s goals to reach carbon neutrality by 2050. Despite criticism, the company’s chief executive officer has publicly supported the field until recently, saying the development is needed while the U.K. still consumes oil and gas.
The project, operated by Siccar Point Energy Ltd. and co-owned by Shell, had to delay works earlier this year while waiting for regulatory consent following pressure from Greenpeace and other groups.
Siccar said in a separate statement that it would continue to engage with the U.K. government and stakeholders on future development of the field.
“Cambo remains critical to the U..K’s energy security and economy,” said Jonathan Roger, Chief Executive Officer of Siccar Point Energy, in the statement. “Whilst we are disappointed at Shell’s change of position, we remain confident about the qualities of a project that will not only create over 1,000 direct jobs as well as thousands more in the supply chain, but also help ease the U.K.’s transition to a low-carbon future.”
Shell said it will continue to work with its joint venture partner and will review the development in the future.
“We believe the North Sea -- and Shell in it -- have a critical role to play in the U.K.’s energy mix, supporting the jobs and skills to enable a smooth transition to Britain’s low-carbon future.”
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