(Image: Maja Smiejkowska/ PA Wire)
A new report has warned that the UK will miss out on a major boost to jobs and economic growth if Prime Minister Andy Burnham does not give the green light to new major oil and gas projects in the North Sea.
But it was immediately dismissed by a leading charity, with Oxfam UK declaring it is “hardly surprising that a report commissioned by an oil company concludes that more drilling is a good idea”.
The report, commissioned by Adura, the company created through the merger of Shell’s and Equinor’s UK North Sea assets, concluded that a decision not to approve drilling on Rosebank, Jackdaw and other planned oil developments would result in 3,330 fewer jobs being supported every year. It would also result in £10.8 billion less economic value for the UK over the next decade, it found.
However, the report was strongly criticised by Oxfam Scotland, which declared that “any serious reckoning with the cost of climate breakdown” arising from new drilling projects in the North Sea was conspicuous by its absence.
The study fanned the flames of the long-running row between supporters of North Sea fossil fuel extraction and environmental campaigners opposed to further drilling in the area because of climate change concerns.
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Mr Burnham had been expected to make an early decision on whether to give the go-ahead to the Rosebank oil and Jackdaw gas projects shortly after succeeding Sir Keir Starmer as Prime Minister in July. But he has yet to make a decision.
Backers say the projects would boost the Scottish economy and strengthen energy security at a time when domestic fuel bills are rising again because of conflict in the Middle East and disruption in the Strait of Hormuz, through which a significant share of the world’s oil passes.
Campaigners, however, argue that sanctioning new fossil fuel extraction would worsen the effects of climate change.
The analysis carried out by Public First for Adura found that approving Rosebank and other planned fields would support £35.3 billion in UK gross value added between 2026 and 2035, compared with £24.5 billion if key oil projects fail to secure approval.
The number of jobs supported would fall from an average of 13,860 a year to 10,530 a year, meaning 3,330 fewer jobs across the UK every year. According to the report, Adura would expect to support around 9,450 jobs a year over the next decade if the Jackdaw and Rosebank projects proceed alongside the necessary investment. But if the projects do not go ahead that figure falls to around 7,100 jobs per year, suggesting Rosebank and Jackdaw are worth more than 2,400 jobs annually.
Nick McCulloch, chief executive of Adura, said: “This report puts a clear price on leaving viable North Sea resources from existing licensed fields in the ground.
“Failure to approve Rosebank and other planned developments would mean billions of pounds less economic value for the UK and thousands fewer jobs supported every year.
“Jackdaw and Rosebank are two of the most important investment decisions now facing the UK. Their impact will be felt well beyond the projects themselves, across the supply chain, the wider economy and the public finances.
“The UK North Sea still represents a substantial economic prize. Decisions taken now will help determine how much of that value, employment and investment is retained here in Britain.”
Katherine May, head of Oxfam Scotland, said: “It's hardly surprising that a report commissioned by an oil company concludes that more drilling is a good idea. Asking it to assess Jackdaw and Rosebank is like asking a seagull whether chips should be left unguarded.
“This report talks about an economic prize: a prize for the very few at the expense of communities in the UK [and] around the globe. Conspicuously absent is any serious reckoning with the cost of climate breakdown.
“The UK’s own climate advisers warn that climate change is increasingly threatening the country’s prosperity and security, with costs that could run to tens of billions of pounds a year by mid-century. Meanwhile, the lifetime emissions from Rosebank and Jackdaw could drive an estimated 65,495 excess heat deaths globally by 2100.
“The real prize is a fair green transition that backs workers, supports communities and builds an economy designed for the future, rather than one anchored to the past.”