North Sea Oil – securing Britain’s energy

Ed Miliband’s shutdown of the North Sea will cost the Government £10bn in lost tax revenue between now and 2030 – Christopher Furlong//Getty Images Ed Miliband’s shutdown of the North Sea will cost the Government £10bn in lost tax revenue between now and 2030 – Christopher Furlong//Getty Images Britain’s largest oil field could be producing millions of barrels a day by the autumn if Ed Miliband approves the North Sea project, its co-owner has said.

Ithaca Energy, which owns the Rosebank site off Shetland, on Wednesday said it was poised to get oil flowing within months but the Energy Secretary first needed to sign off on the plan.

Rosebank, 60 miles west of Shetland, is the North Sea’s largest undeveloped site, which could generate up to 500 million barrels of oil and gas.

However, Mr Miliband has been a fierce critic of the plan, branding it climate vandalism.

He now faces an energy crisis and growing political calls to approve such schemes, piling pressure on him to approve Rosebank.

Donald Trump, the US president, again lashed out at Britain on Tuesday for not taking more advantage of the North Sea, having previously urged the UK Government to restart drilling.

Donald Trump has urged Sir Keir Starmer to ‘immediately’ restart North Sea drilling to combat soaring energy prices – Kent Nishimura/Reuters Donald Trump has urged Sir Keir Starmer to ‘immediately’ restart North Sea drilling to combat soaring energy prices – Kent Nishimura/Reuters Ithaca and Rosebank’s other co-owner Adura have invested more than £3bn in the project with a giant production vessel, the Petrojarl Rosebank, now rounding Africa and due to reach Scottish waters next month.

Ithaca described Rosebank as “entering the final stages of development towards first production in 2026-27” in its latest financial results on Wednesday.

Related video: The future of the North Sea: damming a challenge (MegaBuilds)

MegaBuilds The future of the North Sea: damming a challenge It also announced plans to start producing oil and gas from Cambo, another controversial oil and gas field almost as large as Rosebank, and from Tornado, a mainly gas field. They too will need Mr Miliband’s consent.

Yaniv Friedman, Ithaca’s executive chairman, said: “In the West of Shetland, we saw material project activity, including at Rosebank where we are progressing in line with our development timeline towards first production in 2026-27.

“We also saw significant progress on the maturation of the Cambo and Tornado projects, with all activities supporting a potential final investment decision within 12 months.”

Oil from Rosebank would be exported because the UK now lacks the refinery capacity to process it. But it would generate UK jobs and billions in taxes as well as boosting north European energy supplies.

Rosebank’s gas output would enter UK pipelines, amounting to around 1pc of national needs. The Cambo and Tornado fields lie nearby and their gas output would also enter UK pipes.

Mr Miliband would be likely to face a backlash from Labour backbenchers and climate campaigners should he approve them. All already have licences, granted by the previous government, but lack final development consents.

The decision is meant to be made on technical rather than political grounds – Adura and Ithaca must show the field meets new criteria on overall emissions from producing and using the oil and gas.

Rising pressure on Miliband However, the looming local and regional elections in May, including for the Welsh and Scottish parliaments, also mean any decision will be carefully timed for maximum political advantage.

Andrew Bowie, the shadow secretary of state for Scotland, called on Mr Miliband to approve such projects.

Mr Bowie said: “Thousands of jobs and millions of pounds in revenue are being missed out on every day that goes past while Ed Miliband allows his eco zealotry to trump the national interest.

“The crisis caused by the closing of the Straits of Hormuz and wider impact on oil and gas exports from the Gulf demonstrate more than ever before the necessity of maxing out our domestic supply of energy from the North Sea.”

Ithaca, majority owned by Israel’s Delek and Italy’s Eni, is now one of the UK’s largest offshore operators, but has been hit hard by the North Sea windfall levy which has pushed industry taxes on oil and gas profits to 78pc.

It made pre-tax profits of $840m (£629m) but was hit by the levy and again by Labour’s decision to extend it from 2028 to 2030 – forcing it to set aside an extra $327m.

Iain Lewis, Ithaca’s chief financial officer, said the company had been hit by a tax rate of 110pc resulting in a post-tax loss of $84m.

Separately, Norwegian state-controlled energy giant Equinor has announced a string of new oil and gas discoveries in Norway’s North Sea “Sleipnir” area, close to the UK border, from which gas is piped to Britain.

Cecilie Rønning, from Equinor, said: “Sleipner is an important hub for gas exports, and we must do everything we can to identify the remaining resources. We plan to drill three additional exploration wells and two new production wells in the area this year.”