North Sea supporters have claimed a win despite a landmark court ruling found two major oil and gas developments were “unlawful”.
Scotland’s Court of Session has overturned approvals handed out on the Rosebank North Sea oil field and the Jackdaw gas field, but allowed developers to continue working on them while they resubmit assessments on their environmental impact.
Campaign groups Greenpeace and Uplift, which had lodged the case against the fields, claimed the ruling was “historic victory”.
But others said decision subjects developers Shell (LON: SHEL) and Equinor (OSL: EQNR) to a “mere tick box exercise”.
Norway’s Equinor and Shell, who are both planning to merge all their North Sea assets into a standalone joint venture by the end of the year, also both welcomed the ruling in Scotland’s Court of Session.
The outcome of the assessment demanded by Judge Ericht depends on a review currently being undertaken by the UK government on its approach to oil and gas licensing and whether Jackdaw, and Rosebank, currently the North Sea’s largest undeveloped field, compromise the UK’s net zero targets.
At stake is billions of investment and thousands of jobs both projects could secure.
Rosebank is a $3.8 billion project, targeting 300 million barrels of oil in the West of Shetland over two phases. Developer Equinor said it will create up to 2,000 jobs.
Shell’s Jackdaw, which is around 155 miles east of Aberdeen, is now set to be the first project to try out the new UK’s environmental assessment criteria when its review completes.
© DC ThomsonPanmure Liberum analyst Ashley Kelty branded the ruling a “fudgement” which benefited the oil and gas firms but represented an embarrassment for energy secretary Ed Miliband who will now be forced to rule on whether the fields will have successfully met assessment criteria when submitted.
He said: “This will mean that energy companies will just have to submit another study and it becomes a mere tick box exercise.
“The Court ‘fudgment’ will be claimed a s a victory by both sides, but in reality it is a win for Shell, Equinor and Ithaca as the decision merely delays the projects by a few months and only requires another bit of paper to be submitted.
“It is however highly embarrassing for Ed Miliband as he was praying that the courts would block the developments so he won’t have to be the individual that approves them.
“On the back of the clash with Rachel Reeves over the Heathrow runway he is not having a good week.”
Victory for ‘common sense’
Aberdeen and Grampian Chamber of Commerce (AGCC) chief executive Russell Borthwick said the ruling swerves “international embarrassment”/
He said: “Allowing work on Jackdaw and Rosebank to continue is a victory for common sense and averts what could have been an international embarrassment for the UK on energy security and investment.
“The businesses and workforce we represent want a just transition to net zero which grows our economy, protects jobs and keeps the lights on. Those seeking to deny that fair transition would instead turn the UK into the ultimate climate catfish; sacrificing our domestic energy sector and the livelihoods of 200,000 working families only to import foreign oil and gas at a higher price and with a significantly higher global carbon footprint.
“The public are waking up to this farce – almost three quarters of Scots back domestic production – and our policymakers need to catch up quickly. Halting future oil and gas production makes the UK even more dependent on imports to meet our energy needs – in effect outsourcing and increasing our emissions, rather than reducing them, and doing the same to bills.”
