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Equinor says it stops short of reviewing Rosebank permit risks years overdue – BNN Bloomberg
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Equinor says it stops short of reviewing Rosebank permit risks years overdue – BNN Bloomberg

(Bloomberg) — Equinor ASA warned that any delay in reviewing the permit for its Rosebank oil project would risk delaying the development of Britain’s largest untapped crude oil field by several years.

The Norwegian oil and gas producer is facing Greenpeace and Uplift in a Scottish court, with environmental groups seeking to withdraw the license for the Rosebank and Jackdaw fields after a flawed approval process failed to take into account the full climate impact of the projects.

Activists are calling for a pause on both developments until a new approval process is completed. The companies admit that the granting of the permits involved legal errors, but argue that they followed the law throughout and should still be allowed to proceed with the projects.

The outcome of the cases could have significant implications for the future of the oil and gas industry, with the UK government under pressure to reduce carbon emissions and meet net zero targets.

“Any idea of ​​a small pause in this project is unrealistic,” John MacGregor, a lawyer representing Equinor, told Scotland’s first civil court on Thursday. “Any pause means years of delay.”

Neither environmental group is calling for equipment to be removed or work to be cancelled, but both Equinor and Shell say the complexity of the projects and the logistical challenges involved mean any form of delay will lead to significant costs and difficulties and could ultimately jeopardize viability of developments.

“The scale involved in a project like Rosebank is very significant,” MacGregor said. “Equinor should be seen as an innocent third party,” having fully complied with the law as it stood at the time the consent for the domain was given, he said.

Rosebank, located about 130 kilometers (81 miles) northwest of Scotland’s Shetland Islands, has estimated total recoverable resources at about 300 million barrels of oil. Intended daily production of 70,000 barrels of oil and 21 million cubic meters of gas would make it one of the UK’s largest fields – but a minnow in a world where daily demand exceeds 100 million barrels a day crude oil day.

Even so, Rosebank, which is not due to start pumping oil and gas until at least 2026, has become a battleground for UK environmental groups since it was given the go-ahead in September 2023. Climate activists argue that further development of oil and natural gas resources are incompatible with the country’s net zero goal for 2050. Supporters of the development say that if the field does not go ahead, the country would import simply larger amounts of oil and gas from elsewhere, with no impact on overall global emissions.

Equinor, which owns an 80% stake in Rosebank, and Ithaca Energy, which owns 20%, are to invest $3.8 billion in the project. “Contracts have been awarded, people have been given jobs and work is being done,” MacGregor told the court.

Although they are separate projects, the challenges to Rosebank and Jackdaw are being heard together over four days at the Court of Session in Edinburgh. At the Jackdaw gas field, which is further along in development than Rosebank, a break is not impossible but would be extremely complex and expensive, said Christine O’Neill, who is representing Shell in court.

“The impact of a possible 12-month suspension – and we have no idea how long a suspension will last – would be at least an extra £200m,” O’Neill said. “Uncertainty around the timeframe for a new consent puts the viability of the whole project at risk.”

The Scottish court is expected to announce its decision in the coming weeks.

©2024 Bloomberg LP