The British government on Wednesday gave the green light to the development of a large offshore oil field known as Rosebank, a move expected to provide a modest boost to the country’s oil and gas industry but which has drawn the wrath of environmental groups.
Equinor, the state-controlled Norwegian energy giant that owns 80 percent of Rosebank, said the project would generate 8.1 billion pounds, or about $9.4 billion, in direct investment and would support about 1,600 jobs in the construction phase with 450 jobs remaining for 20 years. Almost a year later. Oil production begins around 2027.
The oil and gas industry in Britain, which employs about 130,000 people, faces an uncertain future due to declining production and recent tax increases on oil company profits.
“I think this is very important for the UK in terms of economic benefits,” said James Reid, senior research analyst at Wood Mackenzie, an energy consultancy.
But environmental groups were dismayed by the decision.
“This is another colossal failure of the leadership of a government that seems determined to ignore scientific warnings about the climate crisis,” Friends of the Earth said in a statement.
The Rosebank field is a very large, undeveloped field in the British North Sea, containing an estimated 300 million barrels of recoverable oil. Discovered nearly two decades ago, it has long been shelved due to the high expected costs associated with its location in the northernmost part of the North Sea, about 80 miles northwest of the Shetland Islands.
A new, cheaper approach led by Equinor has changed the calculus. “We think it is very attractive from an economic standpoint,” said Gilad Myerson, CEO of Ithaca Energy, an Israeli-controlled, London-based company that owns the remaining 20 percent stake in Rosebank.
But there is a heated debate in Britain over whether new oil and natural gas projects should be allowed in the North Sea at all, given the country’s ambitions to achieve net-zero emissions by 2050. Environmental groups have transformed what had been a routine process of reviewing applications for new offshore drilling. As part of testing the government’s commitment to reducing greenhouse gas emissions.
At present, Rishi Sunak’s Conservative government is choosing to allow some new oil investment, believing that it is better for environmental and energy security reasons to produce oil and gas in domestic waters rather than import it from elsewhere.
Energy Security Minister Claire Coutinho said: “It makes sense to use our own supplies from North Sea fields such as Rosebank,” adding that “the jobs and billions of pounds worth of energy our economy deserves will enable us to have greater energy independence.” Which makes us safer against tyrants like Putin,” he said, referring to Russian President Vladimir Putin.
This step comes in the wake of the decision taken last week by Dr. Sunak will delay by five years the ban on the sale of gas and diesel cars to 2035 from 2030, and cut targets for replacing gas boilers.
The North Sea Transitional Authority, which regulates Britain’s oil and gas sector, said in a statement on Wednesday that in approving Rosebank, it had taken “net zero considerations” into account.
The uncertainty hanging over the industry in Britain is unlikely to dissipate. The opposition Labor Party says it will stop approving new oil and gas projects if it wins the next general election, expected to be held next year, although it is not threatening to overturn current approvals.
However, there is potential for Rosebank to open up more of the northern North Sea to future developments, Mr Hans said. Reid, energy analyst.
Rosebank has long been a promising development thwarted by high costs. The site is located in deep water — 3,600 feet below the surface — and has challenging geology. There are also frequent bouts of storms and other adverse weather in the area. Chevron spent years and big bucks trying to figure out how to bring oil to market before shelving the plan in 2013 and selling its 40 percent stake to Equinor in 2018.
Equinor will produce the oil using a floating storage vessel that was used in a field in Norway and is now being retrofitted in Dubai, reducing costs. Mr Hans said reusing the ship, which is smaller than originally envisaged, was a “much cheaper option”. Myerson of Ithaca Energy.
Stephen’s Castle Contributed to reports.
