British Regulator Poised to Approve Shell North Sea Gas Project

A view shows a board with the logo of Shell at the company's fuel station in Saint Petersburg, Russia May 6, 2022. REUTERS/Anton Vaganov

A British regulator is expected to approve in the coming days a revised plan by Shell to develop a North Sea gas field, which had been initially rejected on environmental grounds, three sources told Reuters.

Shell released in March its updated environmental development plans for the Jackdaw field to the Britain's Offshore Petroleum Regulator for Environment and Decommissioning.

Under the new plan, Shell aims to start production from the field, which will supply 6.5% of Britain's gas output, by the second half of 2025.

OPRED had in October, on environmental grounds, rejected the first development plan for the field, which has reserves of between 120 million and 250 million barrels of oil equivalent.

OPRED is expected to give the go-ahead to the new Jackdaw development plans within days, after no significant objections were raised during a public consultation period, two sources told Reuters.

The approval is a major milestone required before Shell decides whether to go ahead with the final investment decision for the field development.

A government spokesperson said: "Development proposals for oilfields under existing licences are a matter for the independent regulators. No decision has been taken yet."

Shell declined to comment.

The process comes as Britain struggles with soaring energy prices in the wake of the war in Ukraine, which have led the government to urge domestic producers to boost investment to ramp up domestic oil and gas production.

Shell's new plan changes the way it processes natural gas at the Shearwater hub, to which the Jackdaw field will be connected. Rather than removing all naturally occurring CO2 from the gas offshore, some of it will be exported to the onshore St Fergus terminal where it will be further treated.