Britain can prove it is a ‘predictable country for investors’ by re-issuing permits, says energy giant
Ed Miliband risks destroying the UK’s reputation if he blocks Britain’s two biggest offshore oil and gas developments, the boss of energy giant Equinor has warned.
Anders Opedal, chief executive, said the Energy Secretary had to issue new permits for the Rosebank and Jackdaw oil and gas fields to ensure the UK is a “predictable country for investors”.
Equinor, Norway’s state-controlled oil company, is the lead developer on Rosebank in the North Sea which is expected to generate nearly £7bn of investment and hundreds of millions of pounds in taxes for the UK.
However, permits for Rosebank and Jackdaw were ruled invalid by a Scottish court last week which ruled that the previous government had failed to account for their impact on carbon emissions.
Sir Keir Starmer and Rachel Reeves, the Chancellor, are understood to be in favour of giving the green light to the developments, a move likely to set them up for a clash with Mr Miliband who fiercely opposes new oil and gas projects.
Mr Opedal said: “Reading the Labour manifesto, Rosebank is an existing licence for an existing field that we are now developing.
“That’s why we think it’s right to continue that development, although we respect that the current governments do not want to issue new licences.
“Although there is a new Government, we expect that [licencing] decisions made by the previous government will be followed through. It is important for the UK to be a predictable country for investors.
“So we are assuming that Rosebank will go through, based on the first approval we got from British authorities.”
Opedal was speaking at Equinor’s capital markets day in London where he also announced plans to raise oil and gas production and cut back on renewables.
The company said it would halve its spending on renewables from $10bn (£8bn) to $5bn, meaning a maximum capacity of 12 gigawatts (GW) instead of 16GW.
A gigawatt is roughly equivalent to the power needs of 1m homes and the capacity reduction means Equinor is slashing the equivalent of 400 large offshore wind turbines from its construction plans.
Rosebank’s estimated 350m barrels of oil mean it is a key part of the company’s plans to increase output with Mr Opedal saying he wanted to see the field producing oil within two years.
Without it, he warned, the UK would lose out on growth and become more reliant on imported oil. The UK consumes about 60m tonnes of oil and 75bn cubic metres of gas a year – and is already heavily reliant on imports.
Mr Opedal said: “Some people think that this project is not necessary. We think differently. We think this project is a very good project.
“If this project is not executed, the oil will be supplied from somewhere else. But that will make the UK more dependent on imports. Rosebank will also contribute to job creation and growth.”
Equinor had expected the Rosebank development to go ahead based on Labour’s manifesto pledges to maintain existing oil and gas production permits.
However, the same manifesto also pledged to block new licences – and the court’s decision last week to revoke the existing permits means Equinor must apply for new ones.
Backbench MPs have said this offers a chance to kill Rosebank off, with some threatening a rebellion if Sir Keir fulfils his assurances to Equinor that the project would be safe in Labour hands.
A Department for Energy Security and Net Zero spokesman has said that, following the legal rulings on offshore licencing, it will shortly issue new guidelines under which Equinor could seek a new permit.
“The Government has already consulted on revised environmental guidance to take into account emissions from burning extracted oil and gas … We will respond to this consultation as soon as possible and developers will be able to apply for consents under this revised regime.”
