Work on the controversial Cambo oil field off the coast of Shetland is on hold, according to the firm that owns a majority stake in the field.
Siccar Point Energy said on Friday it was “pausing the development while we evaluate next steps”.
Jonathan Roger, CEO of Siccar Point Energy said: “Following Shell’s announcement last week, we are in a position where the Cambo project cannot progress on the originally planned timescale.
“We are pausing the development while we evaluate next steps.
“We continue to believe Cambo is a robust project that can play an important part of the UK’s energy security, providing homegrown energy supply and reducing carbon intensive imports, whilst supporting a just transition.”
The announcement comes after oil giant Shell, who have a minority stake in the project, announced earlier this month it would not be investing in the field.
Citing the potential for delay and a lack of strength in the economics, the multinational company said it had concluded against investment.
Siccar Point is still holding discussions with its joint venture partners and wider stakeholders.
The firm says the Cambo field will produce 170 million barrels of oil equivalent during its 25-year operational life and 53.5 billion cubic feet of gas, enough to power 1.5 million homes for a year.
The UK Government says the investment in oil and gas is necessary to avoid a cliff-edge putting jobs and industries in the country at risk.
Katy Heidenreich, supply chain and operations director at trade association Oil & Gas UK, said: “This is a commercial decision and while we can’t comment on specific projects we know that continued investment will be required to avoid increasing reliance on imported energy, protect security of supply and deliver a homegrown energy transition.”
GMB, the energy union, described the decision to pause work on Cambo as amounting to a “surrender of the national interest”.
Gary Smith, GMB general secretary, said: “The cheerleaders for Cambo’s shutdown aren’t just throwing energy workers under the bus, but also our security of supply for the gas we will still need on the road to 2050.”
However, the Green Party and environmental groups welcomed the announcement.
Mary Church, head of campaigns at Friends of the Earth Scotland, said Siccar’s announcement is “another nail in the coffin for the Cambo oil field”.
And Scottish Greens climate spokesperson Mark Ruskell said: “It should not come as a surprise that Cambo is looking increasingly unlikely after Shell withdrew from this reckless proposal.
“We already have far more fossil fuel than we can afford to burn, and the public recognise that to expand further would end any hope of addressing the climate emergency.
“The path to net zero lies not in vast amounts of continued subsidy for an oil and gas industry that is already cutting jobs, but investing in stable jobs in industries like renewable energy, such as the new facility at Nigg.
In November, as COP26 ended in Glasgow, First Minister Nicola Sturgeon voiced her strongest opinion so far on the proposed development, saying: “I don’t think that Cambo should get the green light.”
She had previously urged the UK Government to reassess the plans, amid growing concern over the impact of fossil fuels on climate change.
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