UK Chancellor Rachel Reeves has indicated the Jackdaw and Rosebank oil and gas developments in the North Sea will go ahead despite a court ruling invalidating their approval.
Speaking to the Sun newspaper, Reeves pointed to Labour’s election manifesto which pledged to honour existing North Sea oil and gas licences.
“We said in our manifesto that they would go ahead, that we would honour existing licences, and we’re committed to doing that, and go ahead they will,” Reeves said.
“North Sea oil and gas is going to be really important to the UK economy for many, many decades to come.
“And we want to make sure that fields that have already got licences can continue to exploit those reserves and bring them to market.”
In its manifesto, Labour said it would not issue exploration licences for “new fields”, but vowed to manage North Sea production “in a way that does not jeopardise jobs”.
Under Labour, the UK government decided not to defend its previous approval of Rosebank and Jackdaw in court following the Finch ruling.
Jackdaw and Rosebank uncertainty
There had been uncertainty as to whether the two North Sea developments would go ahead after a Scottish court overturned their environmental approvals earlier this year.
The Court of Session handed down its decision in January in a case brought by environmental campaign groups Greenpeace and Uplift.
The decision followed a 2024 Supreme Court ruling in the Finch case, which centred on an onshore oil well in Surrey.
The Finch case ruling determined that approvals for fossil fuel projects must account for all downstream, or ‘scope 3’, emissions.
© Supplied by Shell UKAs a result, the Court of Session ruled that North Sea operators Shell and Equinor must resubmit their consent applications for Jackdaw and Rosebank respectively.
However, the court stopped short of halting work on the two projects, allowing Shell and Equinor to continue development work while resubmitting their applications.
In its submission to the court, Shell said it has already spent more than £800 million on what it said is a “nationally important” gas project.
Meanwhile, Equinor and its partner Ithaca Energy said they have already committed more than £2.2bn on Rosebank, the UK’s largest remaining untapped oil reserve.
Scope 3 and licensing consultation
In the wake of the Finch ruling, the Department for Energy Security and Net Zero (DESNZ) has launched a consultation on the future of North Sea oil and gas licensing in an effort to provide certainty to the offshore sector.
Trade body Offshore Energies UK (OEUK) has warned that policy uncertainty is leading to UK firms holding back on investing in billions of pounds worth of projects.
As a result, OEUK chief executive David Whitehouse said UK supply chain firms are looking at international opportunities rather than investing at home.
“We need to unlock more projects here in the UK, and that means more oil and gas projects alongside our wind, floating wind, carbon storage and hydrogen projects,” Whitehouse said.
The offshore sector argues that continued sanctioning of oil and gas projects is essential to secure jobs and investment while emerging industries like offshore wind, green hydrogen and carbon capture and storage ramp up.
Analysts have warned as many as 100,000 North Sea jobs could be lost as a result of policies like the windfall tax and banning new oil and gas licences.
The oil and gas industry also argues that reduced North Sea investment could lead to increased emissions due to a greater reliance on imports.
But groups like Greenpeace and Uplift argue that the UK needs to move away from fossil fuels more quickly and invest in areas like offshore wind in order to protect the climate.
