Shell announced a £2 billion investment package for UK energy projects on Thursday, split broadly equally between continued development of its North Sea oil and gas assets and a new portfolio of offshore wind, hydrogen and carbon capture projects in Scotland and the North East of England. The announcement, timed to coincide with the company’s annual general meeting in London, was welcomed by the government as evidence of continued confidence in the UK as an energy investment destination, though environmental groups criticised the ongoing commitment to fossil fuel extraction.
Shell UK chief executive David Bunch said the investment reflected the company’s belief that the UK’s energy transition would require a combination of existing hydrocarbon infrastructure and new low-carbon technologies for the foreseeable future. “The North Sea remains one of the most important domestic energy assets the United Kingdom has,” Bunch said. “Responsible development of those resources, alongside accelerating investment in clean energy, is the most pragmatic path to both energy security and net zero.”
The £1 billion committed to North Sea development will support the continued production at existing fields as well as sanction of two new satellite field developments tied back to existing infrastructure in the Central North Sea. Shell estimates the projects will provide employment for approximately 3,000 workers, predominantly in Aberdeen and the surrounding area, over the next five years. The company noted that UK North Sea operations currently supply approximately 40% of the country’s domestic gas production, a contribution that takes on heightened strategic significance against the backdrop of European energy security concerns following the disruption to Russian gas supplies since 2022.
The clean energy component of the investment includes a 30% stake in a proposed 1.5 gigawatt offshore wind farm in the Southern North Sea, a green hydrogen production facility in Teesside that will use electrolysis powered by renewable electricity, and participation in the East Coast Cluster carbon capture and storage project, which aims to store up to 10 million tonnes of CO2 per year in depleted North Sea reservoirs by 2030.
Energy Secretary Ed Miliband welcomed the announcement, describing it as a demonstration of how established energy companies could play a constructive role in the transition to net zero. However, Greenpeace UK described the continued North Sea investment as “fundamentally incompatible with the UK’s climate commitments” and called on the government to introduce a moratorium on new oil and gas licences.
— Edward Blackwell, London Capital Post
