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The 800 Million Barrel Oilfield Getting Boris Johnson In Trouble

Courtesy of ZeroHedge View original post here.

Authored by Felicity Bradstock via OilPrice.com.

  • Having just hosted COP26 in Glasgow, Boris Johnson is now coming under pressure to cancel plans to explore the Cambo oilfield – a project that is thought to hold 800 million barrels of oil

  • Climate groups argue that the Cambo oilfield exploration contradicts all of the promises and work that was put into COP26

  • Scotland’s First Minister has yet to speak out against Cambo, with industry experts claiming it will produce much-needed low-carbon oil 

The planned Cambo oilfield in the U.K.’s North Sea, thought to hold 800 million barrels of oil, faced significant pressure in the lead up to COP26, as Prime Minister Boris Johnson appeared hypocritical in his promise for a clean energy transition while giving the go-ahead on a new oil exploration project.

Following the global climate summit, will Cambo go ahead?

The proposed exploration would take place in the Cambo oil field, located around 125km west of the Shetland Islands, at a depth of between 1,050m to 1,100m underwater. Johnson continues to back the project, stating that as licensing approval took place in 2001, well before recent considerations for new exploration licensing restrictions, there is no reason to cancel a project that will support the U.K.’s energy security in the coming years. If the project goes ahead, operations in the field could start as early as 2022, with Cambo remaining active for the following 25 years. The development could also help to provide over 1000 jobs, in an industry that suffered greatly during the pandemic. 

Climate activists are staunchly against the new development, suggesting that the first phase of the project alone, which will see the production of 150 million barrels of oil, could produce emissions equivalent to running a coal power plant for 16 years. This August, energy activists delivered an open letter addressed to Johnson in opposition to the project, which received 80,000 signatures

Greenpeace and other environmental groups used the COP26 summit as a stage to oppose Cambo, holding demonstrations outside of the Prime Minister’s Downing Street home as well as in Edinburgh and Glasgow. Activists believe the U.K.’s leading role in COP26, as host to the summit, is contradictory to Johnson’s plans to support Shell and private equity firm Siccar Point Energy’s Cambo development over the coming decades. 

Conversely, others argue it will bring in much-needed revenue and create jobs at a time when oil demand remains high and renewable alternatives are not yet well enough developed to meet this demand. For example, Alister Jack, the UK government's Scottish secretary, stated that the Cambo oilfield should "100%" get the go-ahead, suggesting that it would be "foolish to think that we can just run away from oil and gas", referring to the U.K.’s unpreparedness to make a full clean energy transition at this point in time. 

The U.K. government is using this lack of preparedness for the transition to justify the development of Cambo while suggesting that the oilfield will be designed to produce low-carbon oil, similar to projects being established by Norway’s Equinor. In addition, the field will be ‘electrification-ready’, so that it can be run on onshore renewable power once it becomes available. 

In addition, Alok Sharma, the president-designate of COP26, responded to questions over the hypocrisy of COP26 and the development of Cambo by stating, “The IEA report also makes clear that, even in a net zero scenario, there is some element of oil and gas in that.”, in reference to IEA pressure to shift away from fossil fuels to renewable alternatives. 

To date, Scotland’s First Minister, Nicola Sturgeon, has failed to speak in opposition of the Cambo development, to the dismay of many of Scotland’s youths and climate activists. With approximately 71,000 employed in Scotland’s oil and gas industry, Sturgeon must tread lightly when it comes to energy policy, with tens of thousands of jobs at risk as the clean energy transition moves forward. 

The Oil and Gas Authority’s (OGA) refusal to release briefing documents relating to Cambo, last month, only added to the controversy. OGA is the U.K. regulator that oversees the exploration and development of oil and gas fields in the region. The request for documentation relating to the project, using the Freedom of Information Act, came after rumors suggested drilling equipment was due to be installed at the oilfield, even before it has been signed off.

In addition, the unveiling this week of a document from Cambo’s co-owner Siccar Point stating that because of the UK's "simplified and attractive tax regime… Siccar Point… is not forecasted to pay taxes for many years", the U.K. government has once again come under fire. Despite Johnson’s post-COP26 statement, urging other countries to take action on climate change, the U.K. still offers some of the most favorable tax conditions for energy companies running oil and gas operations. 

With Cambo holding the potential for reduced reliance on energy imports, improving the U.K.’s energy security in the coming years, the controversial oilfield development looks set to go ahead. However, pressure from environmental activists and the international community could see the need for greater investment in CCS technology and the guarantee of low-carbon oil production if Johnson pushes through with plans. 


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