Former SNP figure raises fears for north-east after Shell pulls out of Cambo oil field

Fears have been raised for jobs and investment in the north-east after Shell pulled out of the controversial Cambo oil field development, with a former SNP figure labelling the move “seriously worrying”.

Fergus Mutch, the SNP' s former head of communications, warned against the “negative mood music” towards the sector.

Aberdeen's Chamber of Commerce said a "premature" end to domestic oil and gas production risked repeating “what happened to our mining communities in the 1980s”.

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Shell had a 30 per cent stake in the development off the west coast of Shetland, but said it had concluded the economic case for investment was “not strong enough”.

The decision was welcomed by environmental groups including Greenpeace, which said it should mark the “death blow” for Cambo.

Private equity firm Siccar Point Energy, which owns a majority stake in the field, said it was “disappointed at Shell’s change of position”.

But chief executive Jonathan Roger said: “We are in consultation with the regulator and stakeholders on taking Cambo forward and the next steps required to do that."

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First Minister Nicola Sturgeon previously said she did not think Cambo "should get the green light".

However, the issue has sparked divisions within the SNP.

Mr Mutch, who stood for the party in Aberdeenshire West in May's Holyrood election, told The Scotsman: "Creating any sense of hostility towards companies that could potentially provide transformative investment in Scotland, and that's either in oil and gas or in oil and gas to support the transition to low-carbon tech, could have really severe unintended consequences."

He said developments such as Cambo not going ahead would be "bad news for confidence in the North Sea energy sector".

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Mr Mutch said: "We're cutting off supply, which will make Scotland and the UK more reliant upon imported hydrocarbons, which come with a bigger carbon footprint, and don't come with the guarantee that the areas these oil and gas supplies are coming from are taking the same steps Scotland is to decarbonise its economy."

Mr Mutch, who was the SNP's head of communications and research until February last year, said he previously warned "this kind of negative mood music emanating from Scotland about investment could potentially see wholesale corporate flight within the coming years".

He said: "I didn't realise that meant in the next week. So already it's potentially acting as a deterrent to investment and that's seriously worrying, because if Shell says we're not touching this with a bargepole, then who else follows?”

Gillian Martin, the SNP MSP for Aberdeenshire East, said: "I am of the view that until we no longer need to burn oil and gas to heat our homes, power our transport networks and fuel our manufacturing, that the fossil fuels we use should come from, as far as possible, our domestic production."

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She added: "Cutting off our domestic production would mean we effectively increase our carbon footprint in real terms and put our fuel and power security at risk."

Kirsty Blackman, the SNP MP for Aberdeen North, said she did not think Cambo should go ahead.

She said she had been contacted by around 50 constituents about the oil field, with just three in favour of it.

Ms Blackman said: "We are at the tipping point. This is the point at which we need to bite the bullet and move towards having that just transition."

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Scottish Greens co-leader Patrick Harvie, who is a minister in Ms Sturgeon's government, said Shell pulling out was "very good news".

But Conservative MSP Liam Kerr said: "The Cambo project not going ahead would risk Scottish jobs, risk our energy supply, and risk our ability to meet net zero targets."

A Scottish Government spokesman said its position is clear “that unlimited extraction of fossil fuels is not consistent with our climate obligations and we continue to call on the UK Government, who have the power to act in this instance, to urgently re-assess all approved oil licenses where drilling has not yet commenced against our climate commitments”.

The spokesman said a “just transition must be delivered across all of our communities”, adding: “Our £500 million Just Transition Fund, which we have called on the UK Government multiple times to match, will support the north-east and Moray as one of Scotland’s centres of excellence for the transition to a net zero economy, with our investment supporting transformation across the region.”

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