Equinor submits plans for UK's Rosebank oil field

Norway's state-controlled Equinor has submitted an environmental impact statement detailing development plans for the deepwater Rosebank field west of Shetlands, marking a new chapter in the long-running saga of one of the UK's largest undeveloped oil and gas discoveries.

The plan, published today by the UK's energy ministry, includes a proposed timeline for development work to start in 2024, drilling to begin in 2025 and first oil in the fourth quarter of 2026. Equinor plans to take a final investment decision on a first phase of development in February 2023, in line with its most recent guidance. The field has an estimated 300mn bl of oil equivalent (boe) recoverable oil and gas and was discovered back in 2004. But Rosebank's challenging deepwater environment, a low level of infrastructure in the area, high cost estimates and changes in ownership structure have stalled development over the years.

Equinor's plan is to drill four production wells and three water injection wells in the first phase of the field's development, and then up to three further production wells and two water injectors in a second phase. The wells will be connected to a redeployed floating production, storage and offloading (FPSO) vessel. Equinor plans to export the gas via a new export pipeline connected to the existing West of Shetland Pipeline System, while the oil will be offloaded using shuttle tankers. The company expects oil output from Rosebank to peak at around 70,000 b/d in 2027-28, plateau until 2033 and then decline steadily. Gas production is expected to reach its highest at 1.72mn m³/d in 2029-31 before steadily falling.

Equinor said its target to reach net zero emissions by 2050 was a "key driver" in its assessment of development concepts and that it plans to invest for "future electrification" of the FPSO. "The Rosebank development concept minimises the environmental footprint and supports the UK's net zero target, while maintaining a hydrocarbon supply and contributing to the UK's energy security," the company said.

Equinor was one of the original partners in Rosebank but sold its stake to Austria's OMV in 2013. The firm re-entered the project in 2019 by acquiring a 40pc operating interest from Chevron. North Sea-focused independent Ithaca Energy and Canadian producer Suncor hold 20pc and 40pc, respectively, with the former inheriting a stake through its recent takeover of private equity-backed Siccar Point Energy.

Challenging environment

The west of Shetlands region is relatively undeveloped compared to the rest of the UK North Sea, with extreme weather and sea conditions and the lack of infrastructure making it a costly area to operate in. Chevron queried the economics of Rosebank as far back as 2013. And other projects in the region have faced similar scrutiny. Late last year Shell decided to pull out of the undeveloped Cambo field, saying the economic case for investment is not strong enough. Shell's chief executive Ben van Beurden said last week that the firm's stance on Cambo has not changed, although Ithaca, which now operates Cambo following the Siccar acquisition, is aiming for a final investment decision next year.

The Cambo field emerged as a focal point for climate protests in the UK ahead of last year's UN Cop 26 summit in Glasgow, with Greenpeace singling it out in its campaign to pressure the UK government to block new oil and gas projects from going ahead and Scotland's first minister Nicola Sturgeon going on the record to say she thinks the field should not be given the green light. But the external environment has shifted dramatically since then, with the war in Ukraine putting the more pressing issues of energy security and affordability centre stage for European governments as they seek to reduce their reliance on Russian oil and gas.

By Georgia Gratton