UK ‘uninvestable’ if North Sea projects are blocked
The UK will be uninvestable in the eyes of most energy companies if the government blocks the Jackdaw and Rosebank oilfields in the North Sea, the boss of Norway’s state-run oil and gas firm has warned.
Equinor chief Anders Opedal said his firm could pull out of future projects in the UK if the two oil and gas fields waiting on a green light from ministers are axed on environmental grounds.
“Jackdaw and Rosebank have been held up in a legal review for years,” he told the BBC, adding that his energy giant would “have to take a hard view about it” if the government chooses not to rubber stamp the drilling projects.
At an earlier energy conference, Opedal warned not granting approval would constitute a “major setback” that would force Equinor and other players to “ask if the UK is investable”.
The broadside comes amid a lengthy legal and government review of the two North Sea sites that threatens to stretch into its third year if they are not granted ministerial approval before 2027. In January last year, a court ruled that licenses for Jackdaw and Rosebank – which are part-owned by Equinor – were granted unlawfully because they failed to incorporate fully their effect on the climate.
Burnham vows ‘pragmatic approach’ to North Sea
Andy Burnham has adopted a more open-minded tone to North Sea energy than his predecessor, telling last week’s Labour party conference he wanted to take a “pragmatic approach” to drilling. But the two projects have been the subject of a months-long consultation process that is on the verge of wrapping up.
Opedal welcomed the change of tone, but warned the limbo was an “uncomfortable position to be in”.
Branding the de facto ban on new drilling a “political choice”, he said: “The North Sea oil and gas industry started on the UK side. We learned from the UK and it’s actually the same geology on both sides of the border – several fields actually cross it.”
Jackdaw, a major gas field off 150m off the coast of Aberdeen, could produce up to six per cent of the UK’s domestic gas demands were it given the green light. Owner Adura – which is a joint venture between Shell and Equinor – has said it could come online in a matter of weeks if it is given the green light by the Department of Energy Security and Net Zero (Desnz).
Rosebank comprises 90 per cent oil and is the UK’s largest untapped energy reserve. It is believed to hold up to 500m barrels equivalent of oil and gas reserves.
City AM understands that the regulator responsible for carrying out the formal consultation has shared its recommendation over Jackdaw – seen as the less controversial of the two projects – with the energy secretary. It is still weighing its official suggestion on Rosebank.
The Middle East conflict has added to calls for ministers to plough ahead with the North Sea licences, with proponents arguing they will help shore up the country’s energy security and ease the gloomy fiscal outlook. Critics say they would be irreconcilable with the UK’s ambitious climate targets.
A spokeswoman for Desnz said: “Any decision will take into account all relevant evidence, including environmental assessments and public representations received as part of the regulatory process.”