Oil behemoth Equinor has issued a stark warning regarding its future investments in the United Kingdom, hinging on the government’s decision to approve oil and gas projects at Rosebank and Jackdaw. The Norwegian state oil company, part-owner of these fields, expressed concerns over the UK’s investability should the projects be rejected.
CEO of Equinor, expressed doubts about the UK’s future investment environment, stating that the company would have to reconsider its stance if the government decides against authorising the new drilling ventures. The UK government is currently in the final stages of deciding whether to permit these projects, despite opposition from Labour’s election manifesto, which includes a ban on new such developments. A government spokesperson noted that the decision would factor in all pertinent evidence.
Energy Security Concerns
Discussion around UK energy safety has been reignited amid escalating energy bills, with national production projected to drop by half by 2035. Half of the UK’s gas requirements already depend on imports from Norway, where continuous permissions are granted for oil and gas exploration in Norwegian North Sea territories. Equinor forecasts that production levels will remain steady until mid-next decade.
CEO of Equinor feels optimistic about Prime Minister Andy Burnham’s indication of a “pragmatic approach to oil and gas,” suggesting that both Rosebank and Jackdaw should receive approval. However, he acknowledged that the ambiguity in the current situation is causing unease.
Rosebank, the UK’s largest non-developed oil and gas field, is located approximately 80 miles northwest of the Shetland Islands in the North Atlantic, with projections estimating it holds up to 500 million barrels. The exploration licence for Rosebank was originally granted in 2001, and the site was discovered in 2004, with a final investment decision made in 2023. Initially approved by the Conservative government, both Rosebank and Jackdaw faced delays following a legal challenge regarding the projects’ environmental impact evaluation.
Controversy Over New Drilling
The public consultation phase for these sites concluded in August, and Energy Secretary Miatta Fahnbulleh will make the closing decision. Adura, a joint venture including Equinor and Shell, operates both Jackdaw and Rosebank, with Aberdeen-based Ithaca holding a 20% share of Rosebank.
Adura indicated that if approval is granted soon, Jackdaw might commence gas supplies to UK households by this winter, with the construction being nearly complete. However, critics like Tessa Khan, executive director of Uplift, have criticised new drilling projects such as Rosebank, arguing they won’t lower consumer bills and could detriment Britain’s interests. She claimed the output is primarily destined for export, enriching Equinor and, by extension, the Norwegian government, while the UK grapples with high energy costs and a dwindling labour force.
Khan also remarked that Labour’s climate credentials are at risk. In contrast, a government representative underscored the North Sea’s essential role in national energy infrastructure and highlighted that oil and gas will continue to be significant in the energy mix alongside transitioning to clean energy to secure jobs and mitigate climate impact.
The spokesperson added that the decision would consider extensive evidence, including ecological assessments and public feedback from the consultation.
Reporting based on coverage first published by bbc.co.uk.