Britain's $47 Billion North Sea Oil Decision Hangs in the Balance
- UK approvals for Jackdaw and Rosebank remain delayed, with Prime Minister Andy Burnham blaming bureaucratic hurdles and promising a pragmatic decision.
- Shell and Equinor warn that further delays threaten investment, potentially undermining the UK's attractiveness to energy companies.
- The projects could add £35 billion to the UK economy and generate £12.1 billion in tax revenues by 2035, according to an industry-commissioned report.
Approval for more oil and gas drilling at the North Sea sites Jackdaw and Rosebank have been delayed by “government process” and lengthy bureaucratic wrangling, Prime Minister Andy Burnham has said.
Burnham told MPs that he would take a “pragmatic approach” on oil and gas drilling amid calls from energy bosses for drilling to go ahead at the two sites, which were blocked by Scottish courts on environmental grounds in 2024.
The energy secretary, Miatta Fahnbulleh, is expected to make a decision on whether to give drilling the green light at the Jackdaw and Rosebank, which would be operated mainly by Shell and Equinor, within weeks.
Consultations on drilling at either site ended in August, with Fahnbulleh having to balance the growth effects against environmental commitments in her decision.
Both the Rosebank oil field and Jackdaw gas field near Aberdeen had been approved by the former Conservative government. Labour campaigned on a manifesto in 2024 that said it would not issue new licences for oil and gas drilling.
During Prime Minister’s Questions, Tory leader Kemi Badenoch urged Burnham to “stop faffing about” and allow energy bosses to proceed with drilling.
Burnham said: “I’ve had to wait for the government process, which was struck down by the courts under the Conservative government, to be fixed because they messed it up and we inherited that situation.
“I will take a pragmatic approach on oil and gas. We will set out our decisions shortly.”
Jackdaw and Rosebank could ‘add £35bn to UK economy’
Equinor chief executive Anders Opedal said rejections would put the UK’s attractiveness to investors at risk, claiming it would be a “major setback” for the country.
“The Keir Starmer government said the UK was open for business. We’ve applied for consent twice” he said.
“Adura has done everything it has been asked to do. The UK has one of the most rigorous approval processes in the world.”
Jackdaw could begin production this winter if approved, as much of its infrastructure is already in place, industry figures have said,
A report by Public First, commissioned by Adura, the joint venture between Shell and Equinor, said the two projects could generate £35bn in extra value added to the UK economy between 2026 and 2035. Extra tax revenues amounting to £12.1bn could also be built up in the next decade, more than £4bn provided under the current projection.
By Mauricio Alencar via CityAM
Equinor Makes Up to 50 Million BOE Oil and Gas Discovery in North Sea
Norwegian energy major Equinor has announced a new oil and gas discovery in the North Sea, with preliminary estimates indicating between 19 million and 50 million barrels of recoverable oil equivalent (BOE) near the producing Oseberg field.
The discovery, named Grimsnes, was made in exploration well 30/8-7 S in production license PL 190, approximately 15 kilometers southwest of the Oseberg Sør platform and 145 kilometers west of Bergen.
Equinor operates the license with a 50% stake, alongside Norway's state-owned Petoro, which holds 40%, and TotalEnergies (NYSE: TTE), with the remaining 10%.
The company intends to accelerate the development by connecting Grimsnes to the existing Stjerne subsea installation and routing production through the Oseberg Sør platform, reducing the need for new infrastructure and potentially lowering development costs.
Equinor expects an investment decision as early as summer 2027, with first production targeted within three years.
The proposed development would likely involve two or three production wells connected to a standardized four-slot subsea template.
To shorten the development timeline, Equinor plans to begin procuring subsea production equipment in early 2027, potentially before receiving final project approval. Standardized equipment could be reassigned to other developments if Grimsnes does not proceed.
The discovery supports Equinor's broader strategy of maximizing production from mature offshore areas through smaller satellite fields connected to established facilities.
Oseberg Sør, which began producing in 2000, already processes hydrocarbons from several nearby subsea developments. Using this infrastructure allows operators to bring additional resources online without constructing entirely new production platforms.
Equinor is seeking to cut both subsea project development costs and the time between discovery and first production by approximately 50% through standardization and simplified project execution.
The Grimsnes discovery also comes as Norway seeks to sustain oil and gas output from its aging offshore fields while maintaining its role as a major energy supplier to Europe.
Norway remains a critical source of natural gas for European markets, particularly following Europe's efforts to diversify away from Russian pipeline supplies.
Equinor plans to drill approximately 200 near-field exploration wells and complete around 75 subsea developments by 2035, reflecting its increasing emphasis on extracting additional resources from established producing areas.
The company aims to maintain Norwegian continental shelf production at approximately 1.3 million BOE per day through 2035, with roughly 70% of that output expected to come from new wells and developments.
For Equinor and its partners, Grimsnes represents an opportunity to add commercially attractive barrels while extending the productive life of infrastructure already operating in the North Sea.
Although the partners have not disclosed development costs or expected daily production volumes, the discovery highlights the potential for infrastructure-led exploration to offset declining production from Norway's mature offshore fields.
By Charles Kennedy for Oilprice.com
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