UK government will not challenge legal request to block Rosebank oil field

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The Labour government will not oppose a request from environmental groups to block the development of the Rosebank oilfield in the North Sea, which they say breaches the UK’s commitment to net zero emissions.

The government stressed that Thursday’s decision, taken a day before the court hearing in Edinburgh, did not mean Rosebank’s licence, issued by the previous Conservative government, would be revoked.

But the decision casts doubt on the future of the project, one of the largest in the North Sea, on which Norwegian state aid company Equinor and its partner Ithaca plan to spend $3.8 billion in the first phase.

It will also exacerbate the problems facing the UK oil and gas sector, which has been hit by unexpected tax hikes after Russia’s massive invasion of Ukraine in 2022 led to a rise in energy prices for consumers.

The Labour government has faced criticism from the industry after it decided to increase the windfall tax for oil and gas companies by 3 percentage points, even though oil and gas prices have fallen from their 2022 peak.

Campaigners argued that the North Sea Transition Authority’s approval of the Rosebank project was unlawful as it failed to take into account the climate impacts of burning fossil fuels, not just their extraction.

Uplift and Greenpeace separately filed applications in December with the Court of Sessions in Edinburgh, Scotland’s highest civil court, for a judicial review into the decision to allow development of the field, which is located about 80 miles off the coast of the Shetland Islands.

The case had been adjourned pending the outcome of a court case in England, in which activists challenged Surrey County Council’s decision to grant a permit for drilling at a site near Horley in 2019.

Ultimately, the Supreme Court ruled in favor of activists who argued that the council was unlawful in approving the project without requiring a review of downstream emissions.

The Labour government, which won an overwhelming majority in the UK general election in July, has also indicated that it will not approve any new drilling permits in the North Sea and will abolish the investment tax credit that allows companies to offset their tax bills.

The government said on Thursday that its decision not to challenge the case brought by the campaign groups “will save taxpayers money”.

It added that it would launch a consultation later this year on the manifesto pledge not to issue new oil and gas licences, which will form the basis for “environmental guidelines” that the government said would bring “certainty” to the oil and gas industry.

Mel Evans, leader of the climate team at campaign group Greenpeace UK, said the government’s move was “absolutely the right thing to do”.

Tessa Khan, Uplift’s director, said the government has “rightly accepted” that the Rosebank development cannot go ahead without considering the full scale of the damage it will do to the climate.

It is “astonishing that the huge emissions from burning oil and gas have been overlooked until now,” she added.

Equinor, which has an 80 percent stake in Rosebank, said: “We are currently assessing the implications of today’s announcement and will continue to work closely with all relevant stakeholders to advance the project.”

The company previously said the project, which is expected to start producing oil in 2026, would pump about £25 billion into the UK economy over its lifespan of around 25 years.