The UK government has given its strongest signal that there is still political support for the Cambo oilfield after Shell pulled out of the project.
Scottish Secretary Alistair Jack has told MPs on Monday that the government supports oil and gas.
Reports over the weekend suggested that one of the reasons for Shell’s decision was a lack of enthusiasm or vocal backing for the project in Westminster after Nicola Sturgeon, the Scottish first minister, stated her opposition.
However, the decision to proceed or not lies with the UK Government - and Mr Jack stated his support for future drilling in the UK Continental Shelf (UKCS).
Just transition
Speaking to the Scottish Affairs Committee at Westminster, he said: "As you know, we have an oil and gas industry that is in transition, and the key is transition, and we will get to net zero by 2050.
“But we need gas to make blue hydrogen and for other products we need oil. The idea that oil can suddenly be stopped would kill our economy.
“It's not all about driving combustion engines, by then the combustion engine will be a thing of the past. It may well be electricity, it may well be hydrogen, but it will be a thing of the past.
“But we will still need oil for the petrochemicals industry to produce many, many products that our economy relies on - not least instruments for the NHS."
Cambo development
Specifically on Cambo, the minister added: "I still think it's better that we develop Cambo than we bring in that oil that I talked about from another country.
"That's less efficient. We should get it domestically and support jobs in the north east to support jobs in Shetland and other places.
"We should be, I think, clear that we support oil and gas but we support a responsible transition."
Siccar Point Energy - which has 70% ownership of the field - is now in discussions with contractors, supply chain and wider stakeholders to review options, describing the development as "important".