CBI chief calls on Miliband to approve Jackdaw and Rosebank oil fields
The boss of Britain’s largest industry body has called on the government to green-light extraction from two major North Sea oil fields and slash the windfall tax on domestic oil production in a bid to revitalise the country’s ailing oil and gas industry.
CBI chief Rain Newton Smith said the North Sea was a “critical part” of the UK’s energy transition and that removing the additional tax on domestic producer profits and waving through the Jackdaw and Rosebank projects would encourage investment and economic activity.
“[The energy profits levy] is reducing investment at the moment in the North Sea” she told the BBC’s Today programme. “That needs to be reformed. There are proposals on the table that the government are considering – hey should implement them now and be clear that they’re going to encourage that investment and existing extraction.”
Newton-Smith, who has been director general at the CBI for three years, also demanded energy secretary Ed Miliband approve two major oil and gas projects off the north-west coast of Scotland. Operators of the Rosebank and Jackdaw fields were both barred from kicking off extraction last year, after a High Court judge ruled the licences had been granted unlawfully.
“Those should be given approval which will help our existing oil and gas extraction,” Newton-Smith said. “It won’t help the overall cost of energy… but it will impact jobs, and investment, and tax revenue from the North Sea, which are a critical part of the skills we need for that energy transition.”
Government resists calls to ramp up North Sea expansion
The outbreak of war in the Middle East has added to pressure on the government to overrule the decision as a means of securing UK energy production and helping protect jobs during the energy crisis. Newton-Smith’s remarks echo a previous intervention from the think tank run by former Prime Minister Tony Blair, which also urged ministers to accelerate “domestic supply to reduce reliance on volatile imports”.
The North Sea’s Rosebank, which is majority-owned by the Norwegian state energy juggernaut Equinor, contains an estimated 300m-500m barrels of oil, making it the largest known untapped field in British waters. Shell’s Jackdaw gas field is believed to contain up to 250m barrrels of oil. The sites’ owners have suggested they could come online as soon as early 2027 if the extraction ban were to be lifted.
Both fields already boast a government-approved licence, and so are seen by some analysts as a way to boost domestic petrochemical production without the government reneging on its flagship promise not to approve new exploration.
But ministers have so far resisted pressure to green light the projects. In a later interview on the Today programme, James Murray, chief secretary to the Treasury refused to say whether ministers had come to decision on the two fields’ future.
“That’s a decision for the energy secretary to make,” he said, adding: “I’m talking about our broader policy about continuing to use oil and gas from the North Sea.”