Oil & Gas

Equinor ‘still working hard’ on sanctioning Rosebank oilfield despite windfall tax

Norway’s Equinor said it is “still working hard” on sanctioning the Rosebank oilfield in the first quarter of next year – despite the latest windfall tax “uncertainty”.

In a statement to Energy Voice, the firm said it is “evaluating the impact of the EPL (Energy Profits Levy) on our projects” but said work is still progressing on the West of Shetland development.

The firm said that uncertainty is never helpful for “large energy projects” in the long-term, taking a swipe at the energy profits levy (EPL) changes last week from the UK Government.

It said: “Uncertainty makes it harder to take investment decisions, and for UK especially the uncertainty around the longevity of the EPL did not help investor confidence. We are evaluating the impact of the EPL on our projects.

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“As for Rosebank, we are still working hard towards FID in Q1 next year.”

Last week, chancellor Jeremy Hunt unveiled a 10% hike in the levy– taking the headline tax rate for the industry to 75%.

However, a 91% investment allowance for new projects – and an effective subsidy for oil and gas electrification schemes – could actually improve economics for certain schemes.

The statement comes hours after Shell said it, too, was reviewing its planned £25bn investment in the UK energy system in the wake of the EPL announcement.

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Earlier today, Offshore Energies UK CEO Deirdre Michie said the tax puts £200bn of planned energy investments at risk.

Equinor said Rosebank is “estimated to bring £26.8 billion to the UK through tax payments and investments into the UK economy, and will strengthen energy security with oil and gas that is produced with lower carbon than imports, while creating value and jobs in the UK”.

It comes as the Scottish Government voiced opposition to the West of Shetland oilfield earlier today – estimated by partner Ithaca Energy to hold some 300 million barrels of recoverable oil.

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In parliament today, environment minister Mhairi McAllan was asked by Scottish Greens MSP Mark Ruskell whether the field should go ahead – to which she expressed opposition to the new oil and gas licences being awarded by the UK Government.

Watch the exchange below:


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