Cambo’s new owners are taking a ‘billion pound gamble’, campaigners say


Environmental groups say a change in ownership at the controversial Cambo development will not change the outlook for what they call a “doomed” field, following news that Ithaca Energy will acquire operator Siccar Point.

Ithaca Energy on Thursday announced an agreement to buy Siccar Point Energy, operator of the Cambo oil field, for just under $1.5 billion.

In addition to Siccar Point’s 70% operated stake in Cambo, the acquisition would also grant Ithaca a non-operated 20% stake in Rosebank, alongside shares in producing fields such as Schiehallion, Mariner and Jade.

Meanwhile, Shell is retaining its unoperated 30% stake in the controversial project for the time being, after saying in December that it would not move it to an investment decision.

big bet

As NGOs voice their opposition, analysts have argued that Cambo’s “lightning rod” for controversy must have earned a discount on the price of the Ithaca deal.

Ashley Kelty, of investment bank Panmure Gordon, said the acquisition would create “one of the biggest independents in the UKCS” and it was “encouraging” to see new investment in the pool.

Mr Kelty said there was no indication of the level of production or reserves acquired under the deal, but he expected Ithaca to pay around $7 a barrel of oil. oil equivalent for the company’s proven and probable reserves.

“It would be competitive with other transactions, but it is a capex-intensive portfolio,” he said in a note.

“And there must be a reduction to tackle Cambo – the development of the lightning rod for environmentalists.”

John Corr, vice president and head of the North Sea at Welligence Energy Analytics, said the figures appeared to represent a “significant premium paid” and one of the highest considerations per barrel of flow seen in the basin these last years.

He said Ithaca’s true value lies in its access to Cambo and Rosebank, which provide it with “a comprehensive inventory of resources and reserves”, making it an attractive proposition ahead of a possible IPO later in the year. the year.

“With the recently released UK Energy Strategy Paper highlighting the need for local supply and Ithaca’s deep pockets, this potentially puts Cambo in a stronger position to make progress towards development,” Mr Corr added.

“However, the challenges of operating in the harsh environment of West Shetland should not be underestimated, and for Ithaca, which has so far focused on the more benign North Sea , this seems like a big bet on two high-risk developments.”

‘Red Herring’

Still, campaigners against the land said the acquisition did not “change the facts” about the project’s climate impact or its effect on energy prices.

Caroline Rance, climate and energy campaigner for Friends of the Earth Scotland, said: ‘No matter which fossil fuel company benefits from its name on the Cambo licence, it does not change the facts about this oilfield. sentenced. Exploiting Cambo will do nothing to drive up energy bills, but it will further endanger our collective security by worsening climate change.

“The new owners of Cambo will be desperate to cash in on their billion pound gamble, meaning they will be determined to sell any oil they can extract to the highest international bidder. Ithaca would take the profits but the public would bear the risk.

Greenpeace UK oil and gas campaign manager Philip Evans called the move a “red herring”.

“Cambo oil will not improve UK energy security since the type that can be extracted from this field cannot be processed in UK refineries. Claims to the contrary are just lies,” he said.

“The answer to the UK’s energy security lies not in fossil fuels but in local renewables – both offshore and onshore – and stopping the waste of energy in our homes. These rapid deployment solutions will also reduce emissions and reduce energy bills.”

The domain will still need to seek formal approval for development, having been granted a two-year license extension last month.

Ms Rance called on the government to reject Cambo ‘and all new fields’, and the UK and Scottish governments to ‘urgently focus’ on developing renewables, insulating homes and increasing the number of houses heated by green systems.

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Ithaca Energy buys Cambo operator Siccar Point for $1.5 billion

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