Rosebank Oilfield Approval Sparks UK Cabinet Dispute

A dispute is brewing within the UK Cabinet over the proposed Rosebank oilfield, as Chancellor John Healey's Budget reportedly bases economic calculations on the project's approval and anticipated tax revenues. This move intensifies tensions with Energy Secretary Miatta Fahnbulleh, who has yet to make a final decision on the significant oil project located west of the Shetland Islands.

The government has already given the green light to the Jackdaw gas field in the North Sea. However, Fahnbulleh, described as a minister aligned with environmental concerns, has indicated a reluctance to approve Rosebank, citing its limited potential to lower energy bills. She recently asserted her sole authority in deciding the project's fate, distinguishing her role from that of the Prime Minister or the Chancellor, both of whom support proceeding with drilling.

Healey plans to introduce an energy wealth fund in the upcoming Budget, with initial funding of £2 billion. This fund is intended to channel tax revenues from North Sea oil and gas into investments in renewable and low-carbon projects. However, reports suggest that revenue projections used by the Office for Budget Responsibility, and subsequently included in Budget documents, assume the progression of projects that are still awaiting approval, including Rosebank.

The Energy Secretary's quasi-judicial role in approving or rejecting Rosebank could also lead to legal challenges. Fahnbulleh has previously addressed speculation about the Prime Minister or Chancellor making the final decision on a scheme that could secure thousands of jobs. She stated that the process is crucial, especially given the project's contested nature and past delays.

"Ultimately only I can make that decision," Fahnbulleh said, emphasizing that her advisors do not have access to the documents or knowledge of her decisions. "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'."

Andrew Bowie, the shadow energy secretary, criticized the government, 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. 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."

The Conservatives have advocated for measures such as the approval of Rosebank, the termination of Labour's ban on new North Sea licenses, and the repeal of the energy profits levy on oil and gas companies.