Rosebank: Potential delay for oil field as regulator presses Equinor for environmental information
Equinor has been told by the UK’s North Sea oil regulator that it has “not demonstrated” how it will align emissions from its proposed Rosebank project with the sector’s forthcoming carbon budget requirements.
The Offshore Petroleum Regulator for Environment and Decomissioning (OPRED) wrote to Equinor earlier this week to request more information on the environmental impact of Rosebank, at the request of Business and Energy Secretary Grant Shapps.
Rosebank is the largest undeveloped oil field in the North Sea. Located west of Shetland, it is more than twice the size of the controversial Cambo oil field. Equinor’s proposals to drill the field would result in the extraction of more than 300 million barrels of oil.
Equinor did provide an environmental statement on Rosebank to the regulator and UK Government in August. It argued that Rosebank, which is targeting first oil in 2026, would comply with the climate requirements of the North Sea Transition Deal. The Deal was launched in early 2021 and the Government described it, at the time, as “a clear path for the decarbonisation of the oil and gas sector”. Environmental groups have continued to argue – as they did when the Deal was first announced – that it is not in alignment with key climate targets.
The new letter states that, while Equinor has stated a top-line commitment to the North Sea Transition Deal and outlined the project’s emissions, it has not yet provided enough information about how the project supports the broader energy transition and climate policies detailed in the Deal.
OPRED is also asking for more information about how opening Rosebank would impact Equinor’s delivery of its own climate targets. The Norwegian energy major announced a 2050 net-zero target in November 2020, increasing ambitions from a previous “near-zero” target with the same long-term deadline. Equinor supported the 2050 goal with a commitment to peak oil production in or before 2030.
The Stop Rosebank campaign has estimated that the emissions resulting from Rosebank – the majority of which would result from the use of the oil and gas downstream – would be equivalent to the annual CO2 emissions of the world’s 28 lowest-income nations combined.
OPRED has asked Equinor to “clarify” how Rosebank would align with “various policies and commitments” in the transition deal. It wants to see information on the fraction of UK North Sea oil and gas emissions Rosebank would account for in the coming years. It also wants detailed information on how the proposed project would align with Equinor’s own climate goals.
Equinor holds a 40% stake in Rosebank and is spearheading the development as the project’s operator. The remaining stake is split between Suncor Energy (40%) and Siccar Point Energy (20%).
The request for information may delay a final investment decision on the project and, therefore, the timelines for its progression. A final investment decision was, prior to the letter, due in 2023.
Green Party MP Caroline Lucas called OPRED’s letter “major news”. She Tweeted: “Let’s be clear, delay is nothing unusual for this Government – but the evidence that these climate-wrecking fossil fuels must stay in the ground is irrefutable and can’t be ignored.”
The International Energy Agency’s (IEA) pathway to net-zero by 2050 for the energy sector, released in early 2021, stated that no new oil and gas extraction capacity should be approved beyond what was approved by the end of 2021. Nonetheless, the UK Government has forged ahead with a new oil and gas licencing round this season. It has repeatedly argued that this is possible while complying with its 2050 net-zero target.
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