ENVIRONMENTAL campaigners have vowed to fight a new oil field being brought online which is twice the size of Cambo, as a fossil fuel firm takes advantage of UK Government tax breaks.
Norwegian state-owned Equinor has submitted plans for the development of the Rosebank oilfield, west of Shetland, to the UK Government for approval.
Campaigners say that this will allow the firm to pay up to £838 million less in windfall tax due to the investment allowance clause written into the Energy Profits Levy Bill.
The allowance gave companies an incentive to reinvest their profits as for every £1 a company invests, it will get back £0.91 in tax relief.
Equinor recently reported $17.6 billion (£14.5bn) in profits for the second quarter of 2022.
Greenpeace says it will fight the field being brought online, adding: “It’s shameful.”
Meanwhile, Uplift criticised the UK Government for essentially giving Norway “half a billion” as the country heads into a recession and energy bills are pushing families into poverty.
Rosebank is the largest undeveloped oil and gas field in the UK. The first phase of the project alone would seek to extract 324 mmboe (million barrels of oil equivalent) of oil and gas, making it double the size of Cambo.
The UK Government’s £15bn support package will now have to make up funds elsewhere, Uplift claimed, as the windfall tax will now generate half a billion less due to Equinor’s investment in Rosebank.
The campaign group also pointed out that Norway has a sovereign wealth fund worth trillions and the profits from the development will be funnelled there, and not into the UK.
Tessa Khan, director of Uplift, said: “This government is effectively handing over at least half a billion to the Norwegian government, which has a sovereign wealth fund worth trillions, while the UK faces a prolonged recession and millions of British families are being pushed into poverty from soaring energy bills.
“Rosebank will mean a massive transfer of wealth from the British people to one of the richest petro states in the world.
“Approving Rosebank would be a total betrayal of both the Government’s climate goals and the British public who face a severe recession while oil and gas companies make outrageous profits.”
Despite fewer than 10% of people in the UK seeing more North Sea drilling as the solution to the gas price crisis, the Government continues to subsidise investment at great expense to the public, Khan added.
The UK Government admitted that more production in the North Sea will not have any effect on the wholesale market price for gas - which has quadrupled in recent months.
Philip Evans, Greenpeace UK oil and gas transition campaigner, said: “This is what happens when the government helps out oil companies with cushy tax breaks.
“Meanwhile UK households suffer, and the climate crisis rages on, triggering a national emergency and causing death and destruction in the Global South. It’s shameful.
“If Rosebank goes ahead, it will do nothing to help drivers or households with rising costs, because the oil doesn’t belong to the UK and goes to a global market.
“The Government is already facing two legal battles after approving new fossil fuel projects with no proper assessment of climate impacts.
"We will fight Rosebank every step of the way, and urge the Government to crack on with quick, cheap solutions that will actually help in the cost-of-living crisis and the climate emergency - renewables, home insulation and heat pumps.”
It comes after Tory leadership frontrunner, and likely next prime minister, Liz Truss, was asked how she would respond to the cost of living crisis during last night’s Sky News debate.
In response, she advocated that she would “increase the amount of supplies we’re getting out of the North Sea so that we can get more gas into our system”.
Greenpeace currently has two landmark cases waiting to be heard in the Scottish Courts over the viability of two other fields in the north sea - Jackdaw and Vorlich.
Equinor senior vice-president Arne Gurtner claimed the firm is “committed to net-zero by 2050 and is ready to invest to bring energy security while also transitioning to lower-carbon energy sources over the coming years”.
He added: "While we still need oil and gas, we aim to develop and operate projects such as Rosebank with the lowest possible carbon footprint while bringing the maximum value to society in the shape of UK investment, local jobs and energy security.”
