Exclusive-Equinor suspends UK North Sea Rosebank sale ahead of British election, sources say

By Ron Bousso

LONDON (Reuters) -Norwegian energy giant Equinor has suspended efforts to sell a stake in the giant Rosebank oil development in the UK North Sea due to fiscal uncertainty ahead of next month's election in Britain, sources close to the matter said on Friday.

British Prime Minister Rishi Sunak last month called for a snap election on July 4. The opposition Labour party commands a clear lead over Sunak's Conservative party in polls.

Equinor earlier this year launched the sale of a 20% stake in the $3.8 billion Rosebank oil development, the largest project in the ageing basin in recent years.

The process, however, was suspended in recent days due to much uncertainty over the future taxation in the basin, two sources close to the process said.

An Equinor spokesperson declined to comment.

The Rosebank project to develop one of the last known major oil reservoirs has been a lightning rod for climate activists calling for a halt to fossil fuel production activity.

The Labour party said in its manifesto published on Thursday that it will halt new oil and gas exploration licences and increase by 3 percentage points a windfall tax first imposed on oil and gas companies in 2022 after energy prices spiked following Russia's invasion of Ukraine.

The current 35% windfall tax, which will run until 2029, brings the total tax burden on producers to 75%, among the highest in the world.

Labour also vowed to scrap the so-called investment allowance, which exempts most profits that are re-invested in oil and gas production.

"We'll need a lot of clarity from the new government before the process can launch again," one source said.

The Norwegian company currently holds an 80% stake in Rosebank, while Ithaca Energy holds the remaining 20%.

The British government gave Equinor the go-ahead to develop Rosebank last September.

(Reporting by Ron Bousso; editing by David Evans and Susan Fenton)