Rosebank field, the UK’s largest undeveloped oil and gas field receives development approval from the NSTA

The Rosebank field, located in the West of Shetland and operated by Equinor, has received development consent from the North Sea Transitional Authority (NSTA) on 27 September 2023. On the same day, Equinor and partner, Ithaca Energy, confirmed taking a Financial Investment Decision (FID) for Phase 1 of the development to produce an estimated 245 MMbbl of oil. For Phase 1, the joint venture has committed to an investment amounting to USD 3.8 billion. Rosebank is the UK's largest undeveloped oil and gas field with 336 MMboe of 2P reserves.

Rosebank Field Development

Rosebank is planned to be developed in two phases. Phase 1 will involve the drilling of four production wells and three water injectors targeting the Colsay reservoir units during April 2025 to August 2026 using Odjell Drilling's Deepsea Atlantic semi-submersible rig. The production wells will be tied back to Altera Infrastructure's Petrojarl Knarr FPSO. Oil will be offloaded via shuttle tankers with the gas being used as fuel on the FPSO and the excess exported via a new 85 km pipeline to the existing West of Shetland Pipeline Systems for onward transportation to the SAGE gas terminal in St Fergus. The field is expected onstream in 2026/2027 and could produce until 2051 in the high case scenario. Equinor estimates that the oil produced in the first four years will account for approximately 8% of the UK's oil production. Depending on the learnings from Phase 1, a FID for Phase 2 could be taken in 2028. Phase 2 would involve drilling up to three production wells and two water injectors.

Emissions

In order to reduce the emissions associated with the development of Rosebank, Equinor opted to redeploy the Petrojarl Knarr FPSO instead of commissioning a new FPSO, which saved 250 kt of CO2 emissions. Furthermore, Equinor spent GBP 80 million to modify the FPSO to be electrification-ready. In December 2022, a joint study was initiated involving BP, Ithaca and Equinor to explore the potential for a hub electrification concept to power the three West of Shetland assets (Clair, Rosebank and Cambo) using either onshore or offshore wind. Equinor has since indicated that power from shore will be the preferred option.

Rosebank is expected to have an average emission intensity of 12 kg CO2/boe over its entire field life but through electrification the emission intensity could be reduced to less than 3 kg CO2/boe. The North Sea average is currently approximately 21 kg CO2/boe.

Rosebank's Impact on the UK

Equinor believes that Rosebank will provide important local skilled jobs (creating over 1,600 jobs directly by Q2 2025) and increase the UK's energy security, while also meeting the North Sea Transition Deal commitments as a low carbon and energy efficient field. A total tax rate of 75% will be imposed on Equinor's production until March 2028 (Energy Profits Levy sunset clause), which will benefit the UK economy.

Due to the lack of refining capabilities in the UK, the majority of the low carbon intensity Rosebank oil will be exported to refineries in Europe where it can be refined and imported back to the UK. The gas produced from Rosebank will go directly into the UK grid contributing to the UK's energy security. It is notable that the UK has a growing dependence on LNG as domestic gas supply is in decline, but LNG is less favorable due to its higher cost and significantly higher carbon intensity. In 2022 the UK imported 74% more LNG than in the preceding year to satisfy domestic demand and demand in Europe. Rosebank, along with other UK gas fields, can contribute to an increase of indigenous gas production and reduce the UK's reliance on LNG imports while renewable energy alternatives are scaled up.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.