Shell is said to be reconsidering its decision to pull out of a proposed oil field off the coast of Scotland as Britain tries to shore up its energy security while Putin's invasion of Ukraine sends fuel prices soaring and experts warned that the UK cost of living crisis 'hasn’t arrived yet' because inflation has higher to go.
Work on the proposed Cambo oilfield development off the west coast of Shetland was paused in December after the energy company decided to withdraw from the project, concluding the economic case for investment was 'not strong enough'.
Shell made the decision last year to withdraw when the price of crude oil was under $70 a barrel. Russia's attack on Ukraine and the chaos that has followed means that that price hit $130 earlier this month and is currently at $118.
Figures from data firm Experian Catalist show the average price of a litre of fuel at UK forecourts on Sunday was 167p for petrol and 179p for diesel. This is an increase of 18p for petrol and 26p for diesel over the past month.
Over the weekend Boris Johnson issued a passionate defence of his plans to drill for more oil and gas in British waters off Scotland, insisting it will not undermine the fight against climate change and his net zero credentials. In November, Scotland's First Minister Nicola Sturgeon said the Cambo project should not go ahead.
Today sources have told the BBC that although Shell's official position remains the same, it did acknowledge the 'economic, political and regulatory environment had changed enormously' in the three months since Shell announced it was pulling out of the project.
Environmental groups have long opposed the proposed field, warning it would jeopardise hundreds of species in the ocean. Shell pulled out last December following months of pressure from opposition parties and campaigners for the Scottish Government to make its position on Cambo clear.
But industry body Oil and Gas UK previously said blocking long-planned energy projects like Cambo would risk leaving the UK at the mercy of global energy shortages.
It came as former Sainsburys boss Justin King today warned the cost of living crisis is ‘yet to arrive’ and predicts the real pain will begin next month, adding: ‘The rise in energy bills will hit people hard, closely followed by the rise in National Insurance’.
