Copenhagen — A planned oil and gas development in the North Sea is set to go ahead after Norwegian petroleum refining firm Equinor ASA and British oil and gas company Ithaca Energy Plc announced on Wednesday that they had taken the final investment decision to take it forward.
The companies together will invest $3.8 billion in the development.
The decision was taken after the North Sea Transition Authority or NSTA granted consent for the development of the field.
Ithaca Energy shares were gaining around 8% in London trading.
Separately, Equinor said it has signed a new long-term gas sales agreement with Austria's major energy company OMV. The deal is for 5 years starting October 1 this year.
Regarding Rosebank Field, Equinor and Ithaca Energy said the development is expected to reduce carbon emissions, in line with the North Sea Transition Deal.
The Rosebank field is an oil and gas field located about 130 kilometres west of the Shetland Islands on the UK continental shelf, owned 80% and operated by Equinor. Ithaca Energy owns a 20% working interest in Rosebank, in which recoverable resources are estimated at around 300 million barrels of oil from phase 1 and 2, with Phase 1 targeting an estimated 245 million barrels of oil.
The field will be developed with subsea wells tied back to a redeployed Floating Production Storage and Offloading vessel or FPSO.
The first production is expected in 2026-2027.
The Rosebank field will produce more than 21 million standard cubic feet (MMSCF) of natural gas every day. The companies noted that the Rosebank development is estimated to lead to £8.1 billion ($9.8 billion) of total direct investment, of which 78% is likely to be invested in UK-based businesses.
The development is expected to support around 1,600 jobs during the height of the construction phase of the project. It will continue to support around 450 UK-based jobs during the lifetime of the field.
Relating to the development of the field, the companies awarded an integrated engineering, procurement, construction and installation or iEPCI contract to TechnipFMC with an estimated value of $500 million.
Odjfell Drilling has been awarded a rig contract, with an estimated value of $328 million including options, integrated services and other modifications.
Further, Altera has been awarded a bareboat charter and an operations and maintenance contract related to the Petrojarl Knarr FPSO.
Geir Tungesvik, executive vice president Projects, Drilling and Procurement at Equinor, said: "Developing the Rosebank field will allow us to grow our position as a broad energy partner to the UK, while optimising our oil and gas portfolio, and increasing energy supply in Europe. Rosebank provides an opportunity to develop a field within the UK Continental Shelf which will bring significant benefits to Scotland and the wider UK."
In Norway, Equinor shares were trading up 1.36%. In London, Ithaca Energy shares were trading up 7.60%.
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