The UK oil market regulator has rejected Shell’s development plan for the Jackdaw gas and condensate field in the North Sea after considering its environmental statement for the project, which was submitted in May.
The reasons for the decision by the Offshore Petroleum Regulator for Environment & Decommissioning have not yet been published, but a Shell spokesperson confirmed that the development plan has been turned down.
"We’re disappointed by the decision and are considering the implications," the spokesperson said.
A statement is expected soon from the Department for Business, Energy & Industrial Strategy, Upstream understands.
Jackdaw is described as a gas/condensate development comprising a “not permanently attended” wellhead platform with four wells, tied back to the Shell UK-operated Shearwater hub via a 30-kilometre pipeline.
The UK is bearing the brunt of a Europe-wide spike in natural gas wholesale prices.
Domestic debate has been restricted to the challenges of offering protection to consumers rather than addressing supply issues through policy initiatives.
The UK position stands in contrast to Norway where generous temporary tax relief has been provided to boost offshore investment, albeit focused on mature areas and in parallel to moves to end future exploration.
The UK government is also focused on preparations for the COP26 climate conference in Glasgow next month.
Prime Minister Boris Johnson is hopeful of overseeing a major global agreement to keep global warming below 1.5 degrees Celsius compared with pre-industrial temperatures.
The UK has committed to establishing a “climate compatibility checkpoint” for future oil and gas licensing rounds, to ensure new developments are aligned with the government’s climate change ambitions of reaching net zero carbon emissions by 2050.
Jackdaw and the controversial Cambo project — in which Shell is also a partner — are not subject to this bar because their exploration licences were granted before relevant deadlines, but hostility to new fossil fuel projects has been growing.
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