Rosebank, a new North Sea oilfield, will bring billions to the Treasury

Ministers say that the development of Britain’s biggest untapped oilfield in the North Sea would generate billions in tax revenue and boost UK energy security for many decades.

The North Sea Transition Authority approved Rosebank Oil Field 80 miles off Shetland on Wednesday. The field will be drilled in partnership by the Norwegian energy company Equinor, and London-listed Ithaca Energy.

As early as 2026 drilling could begin, resulting in up to 1,200 new jobs. Rosebank will continue to be produced until 2050 and is expected generate tax revenue worth tens or hundreds of millions for the Exchequer.

It is difficult to make exact estimates, given the volatility of oil prices and the uncertainty surrounding future tax rates and profitability. Rosebank has been estimated to yield up to £30bn in tax revenue for the Treasury.

Claire Coutinho said Rosebank will “make us safer against tyrants like Vladimir Putin” and contribute billions to the economy.

Ithaca reported that Rosebank will generate PS8.1bn in investment. UK-based businesses are expected to benefit from a £6.3bn increase in new business according to a Wood Mackenzie/Voar Energy study.

The project approval was met with immediate opposition from climate activists who claim that new oil projects do not align with Britain’s climate goals.

Green Party MP Caroline Lucas called the decision “climate crimes” and “morally offensive”.

Uplift, an environmental pressure group, has already pledged to take legal action to stop the development. It claimed to have written the government over concerns that the approval was illegal.

Conservative peer Lord Goldsmith stated that he “could not” vote for his party after the decision was made to approve the development.

The former environment minister, speaking on Radio 4’s pm programme, said about Rosebank: “It has done us unmeasurable harm. It just trashes our reputation as a mature, reliable member of the international community.

The field’s peak production will be 69,000 barrels per day of oil and 44 millions cubic feet of natural gas.

Rosebank is expected to produce 225 million tonnes (around half) of carbon dioxide in its first two-to-three decades of operation. This is about half of the UK’s annual emissions.

The government said that the approval process had been thoroughly scrutinised by regulators. This included a detailed assessment of environmental impact and a consultation with the public prior to approval.

Rosebank, it said, also met the UK’s Climate Checkpoints introduced last year. These checkpoints state that all new oil-and-gas developments must be within the carbon budgets of the country.

As other North Sea oil fields reach the end of their lifespan, the project’s emissions are largely offset.

Ms Coutinho stated: “We invest in our world leading renewable energy, but as the independent Climate Change Committee acknowledges, we will require oil and gas to be part of the mix to reach net zero, so it is sensible to use our supplies from North Sea field such as Rosebank.

We will continue to support the UK oil and gas sector to ensure our energy security, to grow our economy, and to help us achieve the transition to cleaner, cheaper energy.

Equinor decided to proceed with Rosebank despite UK’s windfall tax, which increased oil and gas production taxes by 75pc. The additional tax will be in place until 2028. Most of Rosebank’s production is expected to take place after this date.

National Grid, a British energy company, said that the risk of blackouts was “much, very much lower” this winter.

National Grid’s Winter Outlook stated that the risk of lights going out has fallen and is almost back to pre-energy crises normal.

Electricity System Operator of National Grid (ESO) has forecast that the period where demand could outstrip the supply will be around 0.1 hour, or six minute, between October and March. This compares with 0.2 hours during the winter.

Craig Dyke, ESO’s national control head, said that the situation is not benign but, compared to last winter, it’s almost back to where it was.

National Gas, the company that runs the gas grid in Canada, has said they expect gas consumption to remain stable. National Gas said that although homes will burn more gas to produce electricity this year, they will also use more gas.

During cold snaps, Britain may need to import gas from the European Union in order to heat homes. It will also rely heavily on the importation of gas via pipelines or by ship (liquid natural gas, or LNG).

Ian Radley, director of system operations at National Gas said: “While the outlook for this winter is more positive than it was last year, we are still alert to the potential risks and will continue monitoring the international market.”