It’s time to scrutinise the claims that oil from the Cambo oil field will be used to meet domestic energy demand. The oil from Cambo is overwhelmingly likely to be exported for profit and burned abroad. But don't take our word for it. Look at the current oil supply chain for all the evidence you need.
Ok, let's make sense of the chart above. First off, you need to know that the oil in Cambo is a heavy crude--sticky, gloopy stuff. That kind of oil is in very low demand in the UK. It's not high grade. UK refineries don't buy a lot of Cambo-type oil and aren't set up to process large amounts of it into anything that's domestically useful. That's part of the reason it's taken 20 years for the licence-holders to do anything with the Cambo oil field.
But let's be generous and assume that Cambo has the same chance as any other domestically-extracted oil as ending up in the UK supply chain. It doesn't but let's assume it does. What would that mean?
On average, 78% of oil extracted in the UK is exported abroad, as is 41% of output from UK oil refineries. At both the production and refining stage, Cambo oil has a significant chance of being exported. All this translates into just a 12.9% chance that oil from fields like Cambo stays in the UK, goes into a UK refinery and ends up as a product that’s used in this country.
That's a 12.9% chance that Cambo’s oil will (as the industry insists) satisfy domestic demand in the UK and a 87.1% chance that Shell and Siccar Point Energy make a profit selling it on global markets. In other words, there's only a 1 in 8 chance that the oil from Cambo would stay in the UK.
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Now, let's take a look at the 170 million barrels Siccar Point Energy and Shell plan to extract. Using the industry average data on crude oil exports, of the 170 million barrels of oil produced from Cambo, 150 million would be exported and only 20 million would go to domestic use. And that's based on generous assumptions--the reality is the whole lot is likely to be exported. This isn't oil that is being piped onshore. It will be offloaded at sea to tankers, for sale to global markets
You only need to look at the oil supply chain in the UK to see that Cambo oil is most likely to be exported across the globe. Any claim otherwise is misleading or based on a flawed understanding of the industry and global supply chains.
