Prime Minister Andy Burnham is expected to approve the development of the Jackdaw natural gas field in the North Sea before the end of the month, the BBC reported, citing unnamed sources.
The Jackdaw project, along with Rosebank, was initially approved for development several years ago, but environmentalists sued and overturned the approval on the grounds that the effects of that development on the climate were not considered. However, now that oil and gas prices are soaring and the UK’s dependence on imported energy deepens, priorities are being reconsidered.
“We won’t be able to stop using oil and gas for some time. That’s just a fact,” MP Burnham said soon after taking office, suggesting a pragmatic approach to energy policy. “The question is whether we can accelerate use of it so that we pay for the transition,” Burnham also said.
Jackdaw and Rosebank are operated by a joint venture between Shell and Equinor. Rosebank contains an estimated 300 to 500 million barrels of oil and Jackdaw holds enough gas to cover 6.5% of the UK’s gas demand at its peak, according to the partner operators.
Some, including Wood Mackenzie, believe it is not even worth trying to revive the North Sea oil and gas industry, because there is not enough oil and gas left to make it worthwhile. The analytics company estimates that 90% of the UK’s commercially viable oil and gas reserves have already been exhausted.
However, at a time of soaring oil and gas prices, this belief may be challenged. According to Shell and Equinor, which operate Jackdaw and Rosebank under the name Adura, gas from Jackdaw could start flowing as soon as this winter, with all necessary infrastructure 99% complete. Opposition from environmentalists, however, is unlikely to subside, with this week seeing the first protest organized by radical group Just Stop Oil in months.
By Irina Slav for Oilprice.com
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