Cabinet Rift Widens Over Rosebank Oilfield Approval

A division is emerging within the Cabinet over the future of the Rosebank oilfield, with Chancellor John Healey's Budget reportedly assuming the project's approval and the associated tax revenues. This assumption appears to conflict with the position of Energy Secretary Miatta Fahnbulleh, who has yet to make a final decision on the offshore oil development west of the Shetland Islands.

The government has already greenlit the Jackdaw gas field in the North Sea. However, Ms. Fahnbulleh, described as a minister aligned with environmentalist views, has signaled hesitation regarding Rosebank, citing its potentially smaller impact on reducing energy bills. She asserted last week that the decision rests solely with her, not with the Chancellor or Prime Minister Andy Burnham, both of whom reportedly favor proceeding with drilling.

Chancellor Healey is expected to outline a plan in his upcoming Budget to channel tax revenues from North Sea oil and gas into a new energy wealth fund. This fund, intended to receive an initial £2 billion, would then invest in renewable and low-carbon projects. Reports indicate that revenue figures from the North Sea Transition Authority, used by the Office for Budget Responsibility and incorporated into Budget documents, are based on the expectation that some projects not yet formally approved will move forward.

This situation could also lead to legal complexities, as the Energy Secretary holds a 'quasi-judicial' role in determining the fate of projects like Rosebank. The Conservative Party has called for the approval of Rosebank, an end to the current administration's ban on new North Sea licenses, and the repeal of the energy profits levy on oil and gas companies.

Shadow energy secretary Andrew Bowie criticized the government's approach, stating, "Working families need lower energy bills. They were promised £300 off by Labour at the last election, but in reality they have risen by £367." He added, "Yet instead of taking the tough decisions needed to get costs down for everyone, John Healey is contemplating another bailout for Benefits Street, leaving hardworking families high and dry."

Ms. Fahnbulleh addressed speculation that the Prime Minister or Chancellor would ultimately decide the project's fate. "Because it is so contested, process really matters and the last government learned that because they didn’t do the process properly and that is why we have had this massive delay because it was contested and it got turned over in the courts," she said last week. "Ultimately only I can make that decision. I really enjoyed reading bits of the media saying ‘Andy is deciding this, John is deciding that’... actually only I can make that decision and the framework is really tight so even my spads (advisers) don’t see the documents, they don’t know the decisions I make."