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Equinor’s Rosebank oil project in the UK North Sea could be in doubt and Britain’s energy security undermined if the opposition Labour Party wins the next election and follow through on a pledge to ban new developments, industry sources told The Telegraph on Sunday.
Labour leader Keir Starmer plans to officially announce next month the party’s intention to not approve any new oil and gas projects in the North Sea, the Sunday Times reported.
“We are against the granting of new licences for oil and gas in the North Sea. They will do nothing to cut bills as the Tories have acknowledged,” a source at the Labour Party told Sky News.
The Conservatives in power and Conservative Prime Minister Rishi Sunak have announced they would support new licenses and drilling in the North Sea to boost home-grown energy resource supply and reduce the reliance on foreign imports.
Rosebank, operated by Norway’s major Equinor, is expected to begin production in 2027 but has yet to be approved. The project is estimated to create $10 billion (8.1 billion British pounds) of direct investment and generate a total of $29.8 billion (24.1 billion pounds) of gross value added (GVA) for the UK economy, Equinor says.
However, industry sources tell The Telegraph that policy uncertainty ahead and after the next election, and the reported Labour plan to ban new drilling could threaten the project.
“Signalling that there will be no more oil and gas licences does not just impact the long-term environment but short-term as well. Financing for existing production is going to fall away immediately,” a source at a major North Sea producer told The Telegraph.
Offshore Energies UK (OEUK), the leading offshore industry body, said in response to the reports that “Labour’s proposals on oil and gas would undermine UK energy security, threaten jobs, and send import bills surging.”
David Whitehouse, OEUK’s chief executive, commented,
“Homegrown production of oil and gas means we avoid costlier, less secure, and higher carbon footprint imports. Investment in UK production would also support the infrastructure and workforces needed to make cleaner, more affordable energy in the UK, for the UK.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.