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Shell boss Wael Sawan said he would fight all the way to the UK Supreme Court to develop the North Sea’s Jackdaw gasfield after a court revoked permission for the project and another fossil fuel scheme.
Sawan told the Financial Times on Thursday he would “absolutely” go to the UK’s highest court if necessary to secure the Jackdaw project, on which Shell has already spent £800mn.
“Our conviction is this is the right project for the UK,” he said.
His comments came after Scotland’s top civil court ruled that the UK government and the North Sea regulator had unlawfully granted consent for two projects: Shell’s Jackdaw gasfield and the £3bn Rosebank project being developed by Norway’s Equinor and the UK’s Ithaca Energy.
Rosebank is the UK’s largest undeveloped oil reserve and is thought to contain 500mn barrels of oil. The ruling was the latest blow to the country’s rapidly declining fossil fuel extraction industry.
Lord Ericht in the Court of Session said permissions granted for Jackdaw in 2022 and Rosebank in 2023 had to be reconsidered because of a later Supreme Court ruling in a separate case that the emissions from burning fossil fuels must be considered during environmental impact assessments.
The developers had accepted that the original permissions had been issued unlawfully given the Supreme Court finding, but argued they should still be allowed to go ahead given how far the schemes had progressed.
“The public interest in authorities acting lawfully and the private interest of members of the public in climate change outweigh the private interest of the developers,” Lord Ericht decided.
He said Equinor, Ithaca and Shell would be allowed to continue work developing the fields but not to extract oil and gas while the North Sea Transition Authority considered their renewed applications for consents.
The NSTA would this time have to consider the effect of “downstream” emissions from use of the oil and gas produced.
Sawan said: “We are developing a key piece of national infrastructure that could potentially provide heat to 1.6mn British homes rather than importing it. It is a no-brainer. We hope the government is able to urgently support this project, while recognising that it has to go hand in hand with their very bold agenda on renewables. It is not an ‘or’, it has to be an ‘and’.”
The Department for Energy Security and Net Zero is preparing to issue guidance “as soon as possible” on how the environmental impact of oil and gas production should be considered in future applications for consents.
Renewed applications for the Rosebank and Jackdaw fields will be considered under the new system.
“Our priority is to deliver a fair, orderly and prosperous transition in the North Sea in line with our climate and legal obligations,” it said.
In the North Sea, licences give broad permission to explore for oil and gas, while consents are required for specific developments and production activities in the licensed area.
The Labour party, in its election manifesto, pledged it would not grant new exploration licences but also said it would not block existing developments from going ahead.
Conservative leader Kemi Badenoch called the ruling “an act of self-harm”, saying it jarred with the government’s pledge this week to help boost growth.
She claimed Labour ministers were “too scared to fight for the oil and gasfields that deliver energy security and provide jobs for thousands of people”.
The projects had been challenged by environment campaigners Greenpeace and Uplift because downstream emissions were not factored into the NSTA’s original decision. In August, the newly elected Labour government decided not to oppose the campaigners’ legal challenge.
Philip Evans, senior campaigner at Greenpeace UK, called the legal case a “historic win”.
Tessa Khan, executive director of Uplift, said the ruling was a “significant win”, which meant that Rosebank could not go ahead without accounting for its “enormous climate harm”.
The ruling stems from last year’s UK Supreme Court decision in the “Finch” case, involving a potential oil well in Surrey.
The Finch ruling said it was unlawful for regulators to leave emissions from the eventual use of oil and gas out of environmental impact assessments.
Regulators had specifically told the Rosebank and Jackdaw developers not to take account of those emissions in their submissions.
Both Equinor — lead developer of Rosebank — and Shell welcomed the court’s decision to let them go ahead with developing the fields for now.
Equinor said: “We will continue to work closely with the regulators and Department for Energy Security and Net Zero to progress the Rosebank project.”
Shell said: “Today’s ruling rightly allows work to progress on this nationally important energy project while new consents are sought.”
Production from the North Sea has declined in recent years, with investors complaining about costs including “windfall” taxes on their profits levied after energy prices spiked in 2022 following Russia’s full-scale invasion of Ukraine.
This story has been amended to clarify that the ruling concerned consents not licences
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