Ithaca Energy, an oil and gas exploration company controlled by Yitzhak Tshuva’s Delek Group, has been given the regulatory go-ahead for a development plan for the controversial Rosebank oilfield in the British North Sea.
Following the regulatory approval by the UK’s North Sea Transition Authority (NSTA), both partners, Ithaca with a 20 percent stake and Norway’s Equinor with an 80% stake, have made a final decision to jointly invest $3.8 billion to develop Rosebank, which is estimated to be the largest untapped oil and gas field on the British continental shelf.
The Rosebank oil and gas field, operated by Equinor, which is located about 130 kilometers (80 miles) west of the Shetland Islands on the UK continental shelf, is expected to begin production in 2026-2027. The field, which was discovered in 2004, is estimated to produce 300 million barrels of oil, Ithaca said in a statement.
Development of the field will be through subsea wells tied back to a redeployed floating production storage and offloading vessel. Oil will be transported to refineries by shuttle tankers, while gas will be exported through the West of Shetland pipeline system to mainland Scotland.
“Rosebank stands as the largest undeveloped field in the UK, and with the receipt of development consent from the NSTA, we are now poised to embark on a journey that will not only provide critically important domestic energy but also ignite substantial economic impact,” said Ithaca executive chairman Gilad Myerson. “The Rosebank project will create thousands of jobs and contribute significantly to securing the UK’s energy needs for many years to come.”
The project will be pursued in two phases and is estimated to create £8.1 billion ($9.8 billion) of direct investment as well as support around 1,600 jobs during the height of the construction phase of the project, and will continue to support about 450 UK-based jobs during the lifetime of the field, Ithaca said.
Ithaca, which is 89% owned by Tel Aviv-based Delek Group, acquired its working interest in the Rosebank field through the acquisition of Siccar Point Energy in June 2022.
The oil and gas producer, which listed on the London Stock Exchange last November, earlier this month said it agreed to buy the remaining 30% stake it doesn’t already own in the undeveloped Cambo oil and gas field in the West of Shetland region of the British North Sea from oil giant Shell. The Cambo field is projected to be the UK’s second-largest undeveloped oil and gas discovery.
Israeli energy conglomerate Delek Group, through its NewMed Energy unit, formerly Delek Drilling, holds a 45.3% working interest in the Leviathan gas field in the Mediterranean, Israel’s largest offshore gas reservoir. NewMed also owns a 30% stake in Aphrodite natural gas field offshore Cyprus.
Commenting on the Rosebank development, Ithaca CEO Alan Bruce said that the field will “deliver one of the lowest emission intensity assets in the UK.”
In the run-up to the regulatory approval by the UK government, the development of the field sparked backlash from more than 700 environmental campaigners, academics and scientists as they urged in a letter addressed to UK Prime Minister Rishi Sunak the cessation of all new oil and gas development plans.
“There are those who might claim that stopping new developments of oil and gas fields would raise concerns about the affordability and security of future energy supplies, but there is now overwhelming evidence that the UK is far better served by a rapid transition to domestic clean energy sources, particularly renewables, and decarbonisation of our economy,” read the letter signed by UK scientists and academics in March. “Doubling down on fossil fuels will not lower energy bills or enhance our energy security.”
Ithaca and Equinor said that the development plan for the Rosebank field has been optimized to reduce operating carbon emissions. As part of the plan, the developers of the field said that they are committed to electrify the floating production and offloading vessel operated in the extraction process.
“We know that the world needs to transition to new, cleaner energy systems and our broad energy investments into the UK support this,” said Arne Gürtner, senior vice president at Equinor. “And while we do this there is going to be a continued need for oil and gas, which currently meets 76% of the UK’s energy needs.”