OEUK backs Equinor’s plans to develop £4.5bn Rosebank oil and gas field
Industry body Offshore Energies UK (OEUK) has given its backing Equinor’s plans to develop a major oil and gas field on the UK’s continental shelf.
The Norwegian energy giant has submitted its environmental statement for the Rosebank development to theauthorities.
This has eased fears Equinor was considering ditching the £4.5bn project, following the introduction of the Energy Profits Levy this year.
Rosebank contains up to 300m barrels of recoverable oil, according to industry estimates, and is one of the largest untapped discoveries in UK waters.
At its peak, the Rosebank field, which lies about 81 miles north-west of Shetland, is predicted to produce 69,000 barrels of oil per day.
This would be roughly equivalent to eight per cent of the UK’s entire output between 2026 and 2030.
It would also produce about 44m cubic feet of gas (1.2m cubic metres) per day in its first 10 years – enough to supply a city the size of Coventry.
Equinor acquired Rosebank in 2019 and has been working with partners Suncor and Ithaca Energy to develop the field.
This includes £80m up front investment to ensure it will be possible to power operations with electricity.
It predicts the site, if approved, would create £8.1bn of direct investment – of which £6.3bn could go to UK-based businesses.
Ross Dornan, OEUK’s energy market intelligence manager, said: “Rosebank is an exciting development that could set new standards for the UK offshore industry in terms of reducing greenhouse gas emissions. The electrification of oil and gas production is a vital step in meeting the industry’s commitment to cutting emissions by 50 per cent by 2030.”
The Rosebank field was discovered in 2004 and named after a variety of Scottish malt whisky, lies in the Atlantic where the ocean depth is about 3,500 feet.
The oil and gas field lies a further 9,000 under the seabed.
Equinor plans to deliver the field in two phases, with first oil targeted at the end of 2026.
The first stage consists of drilling four production and three water injection wells.
Following the submission of the environmental statement, OPRED will weigh up whether to give consent for development to begin.
North Sea oil and gas exploration is a key feature in the UK’s energy security strategy – unveiled earlier this year following Russia’s invasion of Ukraine.
North Sea decommissioning costs eased
Meanwhile, decommissioning costs for disused offshore oil and gas infrastructure has been cut 25 per cent in the past five years, revealed the North Sea Transition Authority (NSTA).
The regulator’s estimates that the price for scrapping sites falling from £59.7bn in 2017 to £44,5bn this year.
This reflects both vast cost-cutting in the industry but the continued high prices to decommission projects.
OEUK has previously highlighted the scale of the work needed to decommission the UK’s legacy of offshore oil and gas infrastructure.
Its recent Decommissioning Insight report revealed the industry would be spending £16.6bn this decade to recover 1.2m tonnes of disused oil and gas installations and more in following decades.
Commenting on the figures, Ricky Thomson, OEUK’s decommissioning manager, said: “This is a truly remarkable achievement, especially coming after the pandemic and recent economic volatility. We are applying the lessons learnt so we can continue to cut costs and boost safety before the new cost reduction target is announced in 2023.”