Equinor and Ithaca Energy's decision to proceed with the Rosebank deepwater oilfield project in the West of Shetland basin could pave the way for the approval of more fields, according to a report by Wood Mackenzie (Woodmac).

Gail Anderson, Woodmac’s Research Director for the North Sea, noted that Rosebank would account for eight percent of UK liquids output at its peak in 2027/28, making it the largest final investment decision (FID) in two decades. This FID increases the likelihood of other nearby fields, such as Cambo, advancing.

Despite the positive development, Woodmac warns that Rosebank still faces fiscal risks, particularly concerning the UK government's Energy Profits Levy (EPL), a windfall tax for energy companies. A change in government could result in the removal of the Investment Tax Allowance under the EPL, potentially impacting Rosebank's economics.

The North Sea Transition Authority recently granted development and production consent for Rosebank, and the UK government welcomed the decision.

Offshore Energies UK (OEUK) also hailed the approval, emphasizing the importance of projects like Rosebank in ensuring the UK's energy future. OEUK noted that Rosebank, at its peak, could produce 69,000 barrels of oil per day, equivalent to 8% of the UK's output between 2026 and 2030, and over 21 MMSCF of natural gas per day.

However, OEUK highlighted the need for more projects like Rosebank to address the declining UK production and reduce reliance on imported oil and gas.

The CEO of OEUK, David Whitehouse, described Rosebank's approval as "good news for our jobs, our economy, and our secure energy future," emphasizing the importance of securing private investment for the country's energy future.