Plans to develop Rosebank, the UK’s largest untapped oil and gas field, were finally approved by regulators yesterday – sending shares in its backers soaring and triggering a wave of green criticism.
Norwegian energy giant Equinor, which has a controlling 80 per cent stake in the Rosebank project, said the project will bring “significant benefits” to the UK, while minority partner Ithaca Energy expected the field to provide “critical domestic energy” to help the country meet its supply needs.
The two companies have pledged to invest £3bn collectively in developing the site, which could provide 300m barrels of oil and gas equivalent over its operational lifetime.
Gilad Myerson, Ithaca’s executive chairman, told City A.M. that even if the majority of supplies were sold on global markets, “the benefits of developing UK fields goes beyond security of supply” – providing jobs, tax revenues and lowering emissions compared to overseas oil and gas.
Prime Minister Rishi Sunak also believed Rosebank’s approval was “the right long-term decision” for the UK, and that the country could not achieve net zero merely by “wishing it.”
While its approval drew criticism from opposition parties, Labour confirmed it had no plans to retroactively cancel the project if it wins the next election.
Equinor hopes the project will begin production by 2026/27, however the project faces the prospect of legal challenges from environmental campaigners.
Green group Uplift confirmed to City A.M. it plans to launch a judicial review of the project in Scotland – on the grounds that the site is not compatible with the government’s legal commitments to net zero carbon emissions by 2050.
Tessa Khan, executive director at the group, warned the UK now risks “blowing” its climate targets.
Meanwhile, activists from Fossil Free London staged a protest in Westminster following the announcement.
Analysts at Wood Mackenzie warned the project still faces “major risks” due to the UK’s “well-earned reputation for fiscal disruption,” with the windfall tax being introduced and then toughened – putting pressure on company margins.
However, the decision was welcomed by investors with shares in North Sea oil and gas producers soaring on the London Stock Exchange.
Ithaca Energy’s shares skyrocketed 8.8 per cent on the FTSE 250 yesterday, while shares in Enquest (7.9 per cent), Harbour Energy (4.3 per cent), Serica Energy (3.5 per cent) were also up at close of play.