Yahoo Finance Equinor (EQNR) to Advance Rosebank Phase 1 Development Project
Equinor ASA EQNR and Ithaca Energy made a final investment decision to advance the first phase of the Rosebank development project located on the U.K. Continental Shelf.
The project will receive a total investment of $3.8 billion, with Equinor overseeing Rosebank as the majority stakeholder with an 80% interest.
The North Sea Transition Authority (“NSTA”) gave its consent for the development of the Rosebank field. This approval comes as a positive development for the U.K. industry, which has been facing uncertainties related to windfall taxes and project approvals. The NSTA’s decision may potentially face legal challenges from activists, as has been the case with similar decisions in the past.
The Rosebank field is 130 kilometers northwest of the Shetland Islands in a water depth of 1,100 meters. Although relatively modest on a global scale, the Rosebank field is anticipated to yield 300 million barrels of oil throughout its operational lifetime. The project’s Phase 1 is geared toward targeting 245 million barrels of oil production.
The Rosebank field will employ subsea wells connected to a repurposed Floating Production Storage and Offloading (FPSO) vessel starting in 2026-2027. The electrification-ready FPSO has a 70,000-barrel-per-day capacity. Oil will be transported by shuttle tankers and gas will flow through the West of Shetland Pipeline to mainland Scotland.
The Rosebank development is one of the most controversial projects in the energy sector. Environmentalists and academics argue that its approval contradicts net-zero targets. However, the industry asserts its necessity to reduce the dependence on oil and gas imports with larger CO2 profiles.
Britain has granted approval for Equinor’s North Sea Rosebank field, prioritizing energy security despite opposition from environmentalists. Another oil major, BP plc BP, has been pressing energy companies to invest more in hydrocarbon production to prevent a sharp price surge. BP relies heavily on oil and gas as its primary revenue source, with a substantial margin.
Early this year, Shell plc SHEL expected to boost hydrocarbon production under its growth strategy to focus on the most profitable parts of its business, even if they are carbon-intensive, while cutting back on ventures that don’t provide enough profit.
While there is a global push for cleaner and renewable energy sources, the demand for oil and gas remains high, especially in sectors like transportation, industry and petrochemicals. Hence, oil and gas companies continue to invest in fossil fuels to meet the ongoing demand.
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