A cabinet split has emerged over whether to approve drilling at the Rosebank oilfield, with chancellor John Healey in favour of the controversial North Sea project, the Guardian reported on Sunday. Energy secretary Miatta Fahnbulleh is ultimately in charge of the decision and is leaning towards rejecting it after granting permission for the smaller Jackdaw gasfield, the Guardian reported last week.
Healey hinted at his support last week when he told ITV he expected oil and gas revenues to contribute to a new energy wealth fund, suggesting he was anticipating income from Rosebank. The prime minister would be expected to make the final call if there is conflict on the decision. The Mail on Sunday reported that Andy Burnham and Healey had agreed to try to push the project through.
Fahnbulleh told the Guardian the rationale behind Jackdaw did not apply to Rosebank. One is a gasfield that caters for the domestic market, while the other is an oilfield that is mainly for export, she said. Rosebank would produce emissions about seven times greater than Jackdaw, and Fahnbulleh is understood to believe it would do less for UK energy security, given that most of the oil would be exported.
Labour MPs said on Wednesday that there would be a big pushback in the party if Rosebank was approved, though most are prepared to accept the arguments that Jackdaw was a necessary part of the transition to net zero. MPs are understood to have discussed ways of forcing or encouraging a parliamentary vote on Rosebank should it be approved, as a way of expressing dissent.
Fahnbulleh has promised that future revenues from the North Sea will be spent on green energy projects through an energy wealth fund. She said last week that the fund would be given £2bn in the budget. When we have tax revenues that are coming from the oil and gas industry, it is right that we invest that in the transition we need to make in energy, she said, adding that the money would be spent on renewables, nuclear and other clean energy schemes.
Why it matters for wealth
The split signals uncertainty in UK energy policy that could affect North Sea investment returns and the valuation of energy sector holdings. The decision may also influence the scale of revenues flowing into the new energy wealth fund, which Fahnbulleh said would receive £2bn in the budget.
A final decision is expected before the end of the year.
Source: The Guardian
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