THE NORTH Sea Transition Authority (NSTA) yesterday extended the licence for the Cambo oil and gas field for a further two years. Its licence was due to expire today.

The site, situated off the west coast of Shetland, is co-owned by Shell and Siccar Point Energy - with the companies owning 30 and 70 per cent stakes in the development respectively.

Cambo could potentially provide 800m barrels of oil, but the site attracted significant opposition from campaigners while the government regulator considered whether or not to grant a final permit to drill last year.

Shell backed away from the project in December 2021 before any decision was made, citing the potential for delays and a weak economic case for investment in the site.

Since then, the government's outlook towards North Sea fossil fuels has evolved with Prime Minister Boris Johnson considering domestic oil and gas exploration key to ensuring the UK's energy security following Russia's invasion of Ukraine.

Earlier this month, Downing Street held a roundtable with fossil fuel en- ergy chiefs to discuss the potential of ramping up projects in the North Sea.

Shell is now reportedly considering its outlook on the development, with oil prices spiking amid fears of supply shortages - peaking earlier this month at 14-year highs of $139 per barrel.

Markets have since calmed, but prices remain well above the $100 milestone on both major benchmarks.

Sources told the BBC that although Shell's official position remains the same, it recognised the "economic, political and regulatory environment had changed enormously" this year.

In its annual report, the energy giant revealed it was still working with Siccar Point Energy and the government to "map out the next steps" of the Cambo project.

A Shell spokesperson told City A.M.: "At this time there is no change to our position of December 2021, but the extension to the licences will allow time to evaluate all potential future options for the project."

Meanwhile, rival firm BP is reportedly pursuing buyers for its closed Foinaven oilfield in the North Sea, hoping to cash in on growing interest from other companies in exploiting resources in the region.

(c) 2022 City A.M., source Newspaper