The owners of the Rosebank field have today obtained regulatory consent for the development of the field.
Rosebank Background
The Rosebank field was discovered in 2004 and is the UK’s largest undeveloped discovered oilfield. The field is located 130 kilometres west of the Shetland Islands.
The field’s development has been delayed several times with both technical and economic viability cited as one of the key reasons. In 2013, Chevron (the operator at the time) stated that the field did not offer “an economic value proposition that justifies proceeding with an investment of this magnitude”.
Equinor has been the operator of the Rosebank field since 2019, when it acquired a 40% interest and assumed field operatorship from Chevron. Equinor recently deepened its interest in the field through the acquisition of Suncor Energy UK Limited, which owned a 40% stake. The remaining 20% interest is owned by Ithaca Energy.
Regulatory Regime
The development of, and production of hydrocarbons from field in UK territorial waters and UK Continental Shelf (UKCS) is subject to a licensing regime overseen by the North Sea Transition Authority (NSTA), previously known as the Oil and Gas Authority (OGA).
Licensees require the NSTA’s consent to carry out development operations for the purpose of producing hydrocarbons. Consent is given by way of approval by the NSTA of a Field Development Plan (FDP) prepared and submitted by the field operator.
The NSTA is committed to supporting the UK government’s net zero target. The NSTA Strategy includes an obligation on licensees and other relevant persons, in carrying out their regulated activities, to “take appropriate steps to assist the Secretary of State in meeting the net zero target, including by reducing as far as reasonable in the circumstances greenhouse gas emissions from sources such as flaring and venting and power generation, and supporting carbon capture and storage projects”.
When determining whether to approve an FDP the NSTA will, amongst other things, consider whether the proposed development complies with the NSTA Strategy. The NSTA’s announcement today confirms it has taken this into account: “The FDP is awarded in accordance with our published guidance and taking net zero considerations into account throughout the project’s lifecycle.”
The environmental regulation of offshore oil and gas activity is the responsibility of the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED), part of the Department for Energy Security and Net Zero (DESNZ). The NSTA only approves FDPs following OPRED’s approval of an environmental statement, prepared by the field operator.
Development
The Rosebank field is expected to be delivered in two phases. Phase 1 will comprise drilling of four production wells and three water injection wells and Phase 2 may involve drilling up to a further three production wells and two water injection wells.
The wells will be tied back to a used, redeployed FPSO. The FPSO will “electrification ready” from field start-up, to allow it to be powered from shore. Equinor has stated that electrification has the potential to reduce production emissions by over 70% and that, even before production, production emissions from Rosebank will be around 40% below the North Sea average.
Next steps
Rosebank is expected to produce 300 million barrels of oil, with first production being expected in Q4 2026.
The development is expected to be of significant economic benefit to Scotland and the wider UK. Equinor has cited £8.1 billion of direct investment, of which £6.3 billion is likely to be invested directly into UK-based businesses.
In terms of job creation, the development is expected to directly generate in excess of 1,600 jobs at the height of the construction phase. Peak UK-based employment during the development phase is estimated to be 1,200 direct, indirect, and induced jobs. Across the lifetime of the field, Rosebank will continue to support significant employment with an average of 450 UK-based full time direct, indirect and induced jobs.
The Rosebank development has proven highly controversial. Opponents have argued that the development is incompatible with the UK government’s climate commitments. On the other side of the argument, supporters point to the jobs and opportunities for UK business which will created by the development, the contribution the developed field will make to UK energy security and the reduced production emissions from the developed field (compared to production emissions from older UK fields and to the carbon intensity of importing oil from elsewhere to the UK as will be required in the short to medium term) which, it is argued, will support the UK in working towards the net zero by 2050 target.
In granting consent, the UK regulators have concluded that the development is compatible with the UK government’s net zero commitments.
It is likely that the grant of the consent will not end the debate.
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