Equinor has been handed an extension to the Rosebank licences – paving the way for an investment green light.
The North Sea Transition Authority (NSTA) has given a two-year extension to the Norwegian operator to May 31 2024, with the licences having been due to expire last month.
Rosebank, in the West of Shetland, is expected to reach a final investment decision next year.
Siccar Point Energy, a partner on the project, has estimated that Rosebank is capable of producing 300 million barrels of oil.
It remains one of the largest untapped reserves in UK waters and has been reported as one of six developments the government is seeking to “fast-track”.
An Equinor spokesperson said: “Equinor welcomes the North Sea Transition Authority’s decision to extend the licences on the Rosebank development project.
“We will continue to work with our partners and stakeholders to ensure we progress and deliver the Rosebank project to strengthen UK energy security, create local value through highly skilled jobs and enable the UK to reach net zero targets in line with the North Sea Transition Deal”
Equinor hopes to leverage its experience in projects like Johan Castberg in Norway and Bay du Nord in Canada to bring down the costs of Rosebank, previously estimated at £4.5 billion.
The Norwegian oil firm bought a 40% operated stake in the relevant licences from US oil giant Chevron at the end of 2018.
Rosebank lies just 25 miles to the north of Cambo, the controversial oil field which has been a target for climate campaigners.
In the lead up to an FID, Equinor and its partners will need to meet new climate checkpoints put in place by the regulator for approval.
The British Energy Security Strategy, published in April, put development of UK oil and gas front-and-centre however industry has had a mixed reaction to the more recent announcement of a windfall tax last month.
Some firms are expected to be hit harder than others by the levy, depending on their spending plans, and there has been outcry at an investment allowance not covering renewables spending.
However analysts have suggested that “ready to go” projects like Cambo and Rosebank could be accelerated to meet the investment allowance timeframe, which is set to be in place until the end of 2025.
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