The development of Britain’s largest untapped oil field in the North Sea will generate billions of pounds in tax and boost the UK’s energy security for decades, ministers have said.
The North Sea Transition Authority (NSTA) on Wednesday approved the development of the Rosebank oil field 80 miles off the coast of Shetland. The field, which holds up to 500m barrels of oil, will be drilled by Norwegian state energy company Equinor and London-listed Ithaca Energy.
Drilling could start as soon as 2026, creating up to 1,200 jobs. Rosebank, which will be in production until 2050, is expected to generate tens of billions in tax income for the Exchequer over its lifespan.
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Exact estimates are difficult to pin down given volatility in oil prices and the uncertainty around future profitability and tax rates. However, past estimates have suggested Rosebank could yield as much as £30bn for the Treasury over its lifetime.
Claire Coutinho, energy security secretary, said Rosebank would “make us more secure against tyrants” like Vladimir Putin and contribute billions of pounds to the economy.
Rosebank is expected to generate £8.1bn of investment, Ithaca said, while UK-based companies are expected to see a £6.3bn boost in new business, according to a study by Wood Mackenzie and Voar Energy.
The sanctioning of the project has triggered immediate dissent from climate advocates, who assert that new oil endeavours are incongruent with the UK’s climate objectives.
Green Party MP Caroline Lucas criticized the decision as a “climate crime” and labelled it “morally obscene.”
The environmental advocacy group, Uplift, has pledged to pursue legal avenues to obstruct the project, citing concerns that the approval might be unlawful.
Lord Goldsmith, a Conservative Peer, expressed his inability to support the party in the wake of the decision to approve the development.
While speaking on Radio 4’s PM programme, the ex-environment minister commented on Rosebank, stating that it significantly tarnishes the UK’s global reputation and has caused considerable damage.
At its zenith, the field is projected to yield 69,000 barrels of oil and 44 million cubic feet of gas daily.
Over its operational span of two to three decades, Rosebank is expected to generate approximately 225 million tonnes of carbon dioxide, nearly half of the total emissions produced by the entire UK annually.
The Government has emphasized that the project underwent rigorous evaluation by regulators, incorporating a comprehensive environmental impact assessment and public consultation prior to its sanctioning.
It was also stated that Rosebank adheres to the UK’s climate checkpoints, established the previous year, mandating that all new oil and gas initiatives must align with the nation’s carbon budgets.
The emissions from the project are anticipated to be largely counterbalanced by the closure of other North Sea oil projects reaching the conclusion of their operational life.
Ms. Coutinho articulated that investing in world-renowned renewable energy is a priority, but as acknowledged by the independent Climate Change Committee, oil and gas will remain essential components in the transition to net zero. Hence, utilizing domestic supplies from fields like Rosebank is logical.
She further emphasized the ongoing support for the UK’s oil and gas sector to bolster energy security, and economic growth, and facilitate the shift to more affordable, eco-friendly energy.
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