Environmental groups hailed the “beginning of the end” for new fossil projects after Shell said it would pull out of a controversial scheme in the UK North Sea, in another sign of changing priorities in one of the world's main oil & gas regions.

The European supermajor said it won’t participate in the proposed Cambo oil project off Shetland, Scotland, in which it held a 30% non-operating interest, putting its future in doubt.

Shell cited an operating case that is not strong enough, but the decision was seized upon by campaigners who have made the project a symbol of the future of oil & gas in the UK North Sea.

Cambo featured prominently in criticism of the UK’s position during the COP26 climate summit, where government support for the scheme was slammed as incompatible with the nation’s attempts to paint itself as a green leader.

Philip Evans, oil campaigner at Greenpeace UK, said: “This really should be the deathblow for Cambo.

"With yet another key player turning its back on the scheme the government is cutting an increasingly lonely figure with their continued support for the oilfield.”

Friends of the Earth Scotland said: "People power has made the Cambo project so toxic that even a mega-polluter like Shell doesn’t want to be associated with it any more. This marks the beginning of the end for all new oil and gas projects."

The accelerating pace of energy transition in the North Sea to a renewable future has been underlined in recent days by huge offshore wind-led plans unveiled for former Scottish oil & gas facilities at Nigg and Ardersier.

They will help support a boom in Scottish offshore wind sparked by the ScotWind tender currently underway to award leases for up to 10GW of fixed and floating capacity.

Shell – which is itself heavily involved in offshore wind, both fixed-bottom and floating – insisted the Cambo decision was led by business not environmental factors.

A statement said: "After comprehensive screening of the proposed Cambo development, we have concluded the economic case for investment in this project is not strong enough at this time, as well as having the potential for delays.

"However, continued investment in oil and gas in the UK remains critical to the country’s energy security. As Shell works to help accelerate the transition to low-carbon energy, we remain committed to supplying UK customers with the fuels they still rely on, including oil and gas."

The International Energy Agency (IEA) said earlier this year that all new investments in oil & gas projects should cease if the world is to meet climate goals.

But national oil & gas body Oil & Gas UK remained bullish over the future. “This is a commercial decision between partners but doesn’t change the facts that the UK will continue to need new oil and gas projects if we are to protect security of supply, avoid increasing reliance on imports and support jobs,” it said.

Recharge's sister publication Upstream contributed to this article