Shell has been forced to defend its “new” £800million North Sea oil project campaigners have described as an “undetonated carbon bomb” that will rake in more profit for the energy giant. The company, which made an “obscene” annual profit of more than £32billion last year, could be set to keep raking in cash thanks to a new Chinese-built rig. The rig is currently on route to an oil and gas field in the North Sea called Penguins. Campaigners at Global Witness have said that if it comes online as planned in the next few months it will generate billions more for Shell’s shareholders.
This is despite the Government giving the firm almost £494million in tax refunds to shut down rigs in the North Sea.
However, as Penguins will replace some of these, it means British taxpayers will have spent hundreds of millions of pounds shutting down oil rigs that will be simply be replaced by a new one, Global Witness has claimed.
This comes as the firm remains in the spotlight for raking in such eye-watering profits last year due to surging wholesale energy costs. The same price rises have left millions of Britons sitting in freezing homes in a crippling cost of living crisis.
Jon Noronha-Gant, Fossil Fuels campaigner at Global Witness said: “Shell’s giant new oil rig is a symbol of how out of touch the UK government is with what this country needs.
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“In the midst of an energy affordability crisis that was caused by our deep dependency on fossil fuels, our leaders have given half a billion pounds in tax breaks to one of the world’s richest oil companies, only for that company to build another oil rig that could make them billions more in profits.”
However, a Shell spokesperson told Express.co.uk in a statement that the Penguin project is “vital” for slashing the UK’s reliance on “higher carbon and costlier energy imports”.
The spokesperson said: “Households, motorists and businesses need a stable supply of oil and gas, which remain a key part of the UK energy mix as we build more renewable power. Projects like Penguins are vital to that supply and help reduce the UK’s reliance on higher carbon and costlier energy imports.”
However, campaigners also take significant issue with the fact that new fossil fuel projects will emit more carbon into the atmosphere and cause damage to the climate, threatening to scupper the UK’s target of reaching net zero emissions by 2050.
Mr Noronha-Gant said: “Penguins is an undetonated carbon bomb – it will emit more carbon than whole countries, and is an act of self-sabotage to the UK’s plans to become Net Zero by 2050 and become the birthplace of the Green Industrial Revolution. Shell’s claims about job creation are also a red herring – the rig was built in China and will only create a few dozen long-term jobs.
“If the UK is serious about solving the energy crisis and the climate crisis, it should keep North Sea oil in the ground. We need to transition to a cleaner, more secure energy system that’s built on investment in cheap alternatives to fossil fuels in the form of solar and wind power, and the creation of hundreds of thousands of new high-skilled, high-wage green jobs.”
However, Shell disputes these claims, arguing that the UK cannot get rid of its oil dependence straight away. And as opposed to being a “new project”, it is simply carrying on work on oil fields that have been operating for more than 20 years.
The spokesperson added: “After decades of supplying oil and gas, output from the UK North Sea is tailing off and now meets less than 50 percent of the UK’s demand. It is important to stop it tailing off too steeply, while the transition to low-carbon energy gathers pace. The new floating vessel will allow production from the Penguins field to continue to provide the necessary energy that the UK needs. It is not a new field, but one which has already been producing oil and gas for 20 years.”
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The spokesperson said: “After decades of supplying oil and gas, output from the UK North Sea is tailing off and now meets less than 50% of the UK’s demand. It is important to stop it tailing off too steeply, while the transition to low-carbon energy gathers pace.
The new floating vessel will allow production from the Penguins field to continue to provide the necessary energy that the UK needs. It is not a new field, but one which has already been producing oil and gas for 20 years.
“We plan to invest up to £25 billion in the UK energy system over the next decade, providing individual projects remain economically viable under the revised tax regime, and subject to Board approval. More than 75 percent of this is intended for low and zero-carbon technology, including offshore wind, hydrogen and electric mobility.”
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