Equinor Says Halt to Review Rosebank Permit Risks Years of Delay

Equinor ASA warned that any pause to review the permit for its Rosebank oil project would risk delaying the development of the UK’s largest untapped crude deposit by several years.

Author of the article:

Bloomberg News

Alastair Reed

Published Nov 14, 2024  •  3 minute read

Protesters demonstrate against the decision to grant consent for the Rosebank offshore development off Shetland in Edinburgh, Scotland, in Sept. 2023. Photographer: Jeff J Mitchell/Getty Images Photo by Jeff J Mitchell /Photographer: Jeff J Mitchell/Ge

(Bloomberg) — Equinor ASA warned that any pause to review the permit for its Rosebank oil project would risk delaying the development of the UK’s largest untapped crude deposit by several years.

The Norwegian oil and gas producer is up against Greenpeace and Uplift in a Scottish court, with the environmental groups seeking to revoke the license for the Rosebank and Jackdaw fields after a flawed approval process failed to consider the full climate impact of the projects.

Article content

The activists are demanding a pause to both developments until a new approval process can be completed. The companies acknowledge that the award of the permits involved legal errors, but argue that they complied with the law throughout and should still be allowed to proceed with the projects.  

The outcome of the cases could have significant implications for the future of the oil and gas industry, with the UK government under pressure to reduce carbon emissions and meet net zero targets.

“Any notion of a small pause to this project is unrealistic,” John MacGregor, a lawyer representing Equinor, told Scotland’s top civil court on Thursday. “Any pause at all means years of delay.”

Neither environmental group is asking for equipment to be removed or work to be undone, but both Equinor and Shell argue that the complexity of the projects, and the logistical challenges involved, mean any form of delay will result in significant costs and difficulties, and could ultimately jeopardize the viability of the developments.

“The scale involved in a project like Rosebank is highly significant,” MacGregor said. “Equinor should be seen as an innocent third party,” having fully complied with the law as it stood at the time that consent for the field was given, he said.

Article content

Article content

Rosebank, located about 130 kilometers (81 miles) northwest of Scotland’s Shetland Islands, has estimated total recoverable resources of about 300 million barrels of oil. Intended daily production of 70,000 barrels of oil and 21 million cubic feet of gas would make it one of the largest fields in the UK — but a minnow in a world where daily demand exceeds 100 million barrels a day of crude. 

Even so Rosebank, which isn’t due to start pumping oil and gas until at least 2026, has become a battleground for environmental groups in the UK since receiving the go-ahead in September 2023. Climate activists argue that further development of UK oil and gas resources is incompatible with the country’s 2050 net zero target. Supporters of the development say that if the field doesn’t go ahead, the country would simply import greater amounts of oil and gas from elsewhere, with no impact on overall global emissions. 

Equinor, which has an 80% stake in Rosebank, and Ithaca Energy, which has 20%, are set to invest $3.8 billion in the project. “Contracts have been awarded, people have been given jobs and work is being done,” MacGregor told the court. 

Article content

While they are separate projects, the challenges to Rosebank and Jackdaw are being heard together over four days at the Court of Session in Edinburgh. At the Jackdaw gas field, which is further along in terms of development than Rosebank, a pause is not impossible but would be highly complex and costly, said Christine O’Neill, who is representing Shell in court.

“The impact of a potential suspension of 12 months — and we have no idea how long a suspension would last — would be at least £200 million-plus,” O’Neill said. “The uncertainty around the timescale for a fresh consent puts the viability of the whole project at risk.”

The Scottish court is expected to announce its decision in the coming weeks.

Article content