Adura seeks Jackdaw approval as Labour faces North Sea tax dilemma
A £1.5bn North Sea gas project awaiting final approval has become a flashpoint for Labour, pitting dwindling basin output and a 78% windfall tax against climate commitments.
Adura, a joint venture between Shell and Equinor, has submitted revised environmental assessments to UK regulators for its Jackdaw gas field following a court ruling that voided its previous approval. The Aberdeen-based company says the £1.5bn project is ready to produce 6% of the UK's gas supply from October 1, powering 1.4 million homes, if granted consent.
Adura is simultaneously seeking approval for its Rosebank oil field, which holds an estimated 300 million to 500 million barrels and represents the largest known untapped reserve in UK waters. The regulatory outcomes carry heavy implications for a basin where production has plummeted from a 1999 peak of 4.5 million barrels of oil equivalent per day to just over one million in 2024.
The projects are intensifying pressure on the government to reform the energy profits levy, a 78% windfall tax on production that deters capital expenditure. Labour figures including Andy Burnham face calls from trade unions, Westminster's energy committee, and former prime minister Tony Blair to lower and stabilize taxation to prevent further capital flight.
Energy Secretary Ed Miliband has historically opposed new exploration, arguing in April that "drilling every last drop will not take a penny off bills" and "cannot give us energy security." However, global supply disruptions linked to conflicts in Ukraine and Iran have forced a partial policy shift, with Labour pledging to allow some new drilling if tied back to existing infrastructure.
The political and economic stakes are acute in northeast Scotland, home to roughly a third of the UK's 115,000 offshore oil and gas workers. The Energy Transition Institute at Robert Gordon University projects 1,600 annual offshore job losses over the next decade, a vulnerability exploited by the Conservatives to win the recent Aberdeen South by-election.
Adura chief executive Neil McCulloch warned that the UK's roughly eight days of gas storage leaves it exposed to supply emergencies. International Energy Agency executive director Fatih Birol countered that Jackdaw and Rosebank "would not make any significant difference" to the energy crisis, adding they "would not change much for the UK's energy security, nor would they change the price of oil and gas."
Environmental groups like Greenpeace dismissed Adura's claim that Jackdaw represents less than 0.02% of annual global emissions as "self-serving." The final licensing decisions now rest with Miliband and the offshore regulator, testing whether economic pragmatism will outweigh strict climate mandates.
