ROYAL Dutch Shell boss Ben van Beurden has defended plans for the controversial Cambo oil field development off Shetland as he declared the UK North Sea is a global leader in terms of the energy transition.

Shell has faced huge criticism from campaigners after it emerged that the company planned to develop the massive Cambo field with Siccar Point Energy.

Groups such as Greenpeace have urged the Government to block the development, the output from which they claim could lead to massive amounts of emissions in coming decades.

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However, after Shell posted a third quarter profit of $4.1 billion (£3bn), directors said if the UK blocks new oil gas developments it will only have to increase imports to meet expected demand.

That could result in emissions rising and costs increasing for consumers as well as depriving the UK of benefits that oil and gas firms could provide in the effort to clean up its energy system.

Mr van Beurden told reporters: “If the Government of the UK wants to supply at least part of its energy needs with domestic resources then it should develop projects like Cambo.”

He added: “If you say we’re not going to develop our national resource in a basin that actually has one of the most progressive regulations when it comes to the energy transition, done by a company that is going to use some of that cash flow to actually drive the energy transition in other parts of the energy system, we don’t want any part of that let us just import it from elsewhere, how does that make sense?”

Shell expects to be able to use the profits it makes on oil and gas production in areas such as the North Sea to fund investment in the new energy systems and technologies that will be required to cut global emissions.

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Days after a significant Dutch pension fund, ABP, said it planned to sell its holdings in fossil fuel producers including Shell, citing the need to accelerate the energy transition, Mr van Beurden observed: “Symbolic action is gaining, which is not necessarily the right thing to do.”

He added: “Without companies like us, our skills scope and scale to convert the energy system … I think you can safely say the energy transition is going to be a whole lot more difficult and may actually not even happen at the pace needed.

“So I think it is really disappointing that long term investors run away from a company that is actually leading in this field.”

While hedge fund Third Point has called for Shell to be broken up, Mr van Beurden said the fact the group had operations across the value chain and took a long term approach provided big benefits.

Mr van Beurden highlighted the value of the North Sea Transition Deal agreed by the UK Government to help maximise the potential contribution of oil and gas firms. This is expected to involve firms cutting emissions associated with production and supporting the development of clean energy assets ranging from windfarms to hydrogen fuel production facilities.

“I think the North Sea is an outstanding basin, not just geologically but with the North Sea Transition Deal being put in place it is probably one of the leading, if not the leading basin when it comes to the energy transition and carbon intensity,” said Mr van Beurden.

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However, the Dutch executive said he was disappointed that the Government had not selected the Scottish carbon capture cluster for fast track status when it announced the results of a landmark funding competition last week. The Scottish cluster was given reserve status behind projects covering Northern England and Wales. Mr van Beurden said Shell still expects to play a part in the Scottish cluster.

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Mr van Beurden noted Shell generated record cash flow in the third quarter, of $17.5bn, and had said it planned to distribute $7bn to shareholders following the $9.5bn sale of assets in the Permian basin in Texas.

The group yesterday announced that it aimed to halve the Scope 1 and 2 emissions from operations under its control compared to 2016 levels, net of amounts absorbed.

“Altogether, this is clear evidence of how we are accelerating our Powering Progress strategy, purposefully and profitably," said Mr van Beurden.

He noted Shell had made policy recommendations and was working with customers to help cut Scope 3 emissions, which result from use of its products by others.

Analysts had expected Shell to make around $5.3bn third quarter profit. The group cited “adverse one-off tax impacts, lower production volumes partly due to the impact of Hurricane Ida, and comparative lower contributions from trading and optimisation”. These offset the benefit of oil and gas price increases in the quarter.

Shell made $1bn profit in the third quarter last year amid the fallout from the coronavirus crisis.

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Stuart Lamont, investment manager at Brewin Dolphin, said: “Shell is in a much better position than it was last year as it continues to recover from the pandemic, buoyed by significantly stronger and more sustained oil prices.”

Shell declared a third quarter dividend of 24 cents per share in line with the second quarter. It paid 16.65c for the third quarter last year.

In April last year Shell announced the first cut in its dividend since the second world war. It slashed the first quarter payment for 2020, to 16 cents per share from 47 cents in the preceding three months, to help save cash.

Shell has focused North Sea investment on a relatively narrow range of big assets in recent years. In January the company announced plans to shed around 330 jobs in its UK North Sea business. It employed around 1,300 people in the business then.

Royal Dutch Shell A shares closed down 52.4p at 1713.2p.