ITH Ithaca Energy Plc

By Yusuf Khan and Christian Moess Laursen

An oil field northwest of Shetland, off the coast of Scotland, has been given the go-ahead to start pumping oil and gas, despite concerns from environmental groups about starting new fossil-fuel projects.

The Rosebank oil field was given the green light by the North Sea Transition Authority on Wednesday for owners Equinor and Ithaca Energy to start drilling, though this is not expected to start until the second quarter of 2025 with production expected between 2026 and 2027. London-listed Ithaca said the parties will jointly invest $3.8 billion in the field, with Equinor owning 80% of the project, and the remaining owned by Ithaca.

"Rosebank stands as the largest undeveloped field in the U.K., and with the receipt of development consent from the NSTA, we are now poised to embark on a journey that will not only provide critically important domestic energy but also ignite substantial economic impact," Ithaca's Executive Chairman Gilad Myerson said.

At its peak the project should produce 69,000 barrels of oil and 44 million cubic feet of gas a day. Equinor said total recoverable resources are estimated at around 300 million barrels of oil. The project is expected to take place in two phases, the first recovering 245 million barrels of oil.

The U.K. government said the project will boost energy security, with a direct investment of 8 billion pounds ($9.72 billion) according to estimates from Equinor.

The move to approve the site comes as the U.K. government looks to loosen rules around environmental regulations, for example pushing a ban on sales of new petrol and diesel cars to 2035, though it says it is committed to net-zero.

"We are investing on our world-leading renewable energy but, as the independent Climate Change Committee recognize, we will need oil and gas as part of that mix on the path to net zero and so it makes sense to use our own supplies from North Sea fields such as Rosebank," the U.K. government's energy security secretary, Claire Coutinho, said in a statement.

At 0812 GMT, Ithaca Energy's shares were up 7.7% at 175.00 pence, while Equinor traded 1.3% higher at NOK351.20.

Write to Yusuf Khan at yusuf.khan@wsj.com and Christian Moess Laursen at christian.moess@wsj.com

(END) Dow Jones Newswires

September 27, 2023 04:43 ET (08:43 GMT)

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