Cabinet Divided Over Whether to Approve Rosebank Oilfield

A split has opened in the cabinet over whether to give the go-ahead to drilling at the Rosebank oilfield in the North Sea. The chancellor, John Healey, is understood to favour approving the controversial project.

Energy secretary Miatta Fahnbulleh has formal responsibility for the decision. The Guardian reported last week that she was leaning toward refusing consent, having earlier granted permission for the smaller Jackdaw gasfield. Officials say she has not yet made up her mind.

Healey is understood to support approving the licence, which is currently on hold because of concerns about the environmental impact of the development. Last week he told ITV that he expected oil and gas revenues to feed a new energy wealth fund, which suggested he was counting on income from Rosebank. If ministers cannot agree, the prime minister would be expected to make the final call.

Downing Street declined to comment on Sunday after the Mail on Sunday reported that Andy Burnham and Healey had agreed to try to push the project through. It said the matter was for the energy secretary. Even so, the views of Burnham and Healey are expected to carry weight.

Fahnbulleh told the Guardian that the reasoning behind Jackdaw did not extend to Rosebank. She said the UK would depend on gas during its transition to net zero, and that it was better to source it from relatively low-carbon North Sea fields than to import it. "One is a gasfield that caters for the domestic market, while the other is an oilfield that is mainly for export," she said. She added that each application should be judged on its own merits and that any decision must be consistent with climate obligations and carbon budgets.

Rosebank would produce emissions about seven times greater than Jackdaw. Fahnbulleh is understood to believe it would do less for UK energy security, since most of its oil would be exported.

A rejection would hurt the North Sea energy industry and be a major win for climate campaigners. A final decision is expected before the end of the year.

Labour MPs said on Wednesday that approval would prompt a strong backlash within the party, although most accept that Jackdaw was a necessary part of the move to net zero. MPs are understood to have discussed ways of forcing or encouraging a parliamentary vote on Rosebank if it is approved, as a means of registering dissent.

A spokesperson for the Department for Energy Security and Net Zero said it does not comment on speculation. They described the North Sea as a vital national asset and said oil and gas will keep playing an important role in the energy system for decades, alongside the shift to clean power. Any decision, they said, would weigh all relevant evidence, including environmental assessments and public representations from the consultation.

Fahnbulleh has promised that future North Sea revenues will be spent on green energy projects through the wealth fund, which she said would receive £2bn in the budget. The money would go to renewables, nuclear and other clean energy schemes. She could not say which tax revenues would be directed to the fund or how much they might raise, saying the chancellor would set out those details in the budget.