Adura North Sea projects face tax break scrutiny ahead of PM decision
Environmental groups are challenging the economic rationale for Adura's Jackdaw and Rosebank fields, arguing that heavy tax reliefs will wipe out any immediate tax revenues as incoming prime minister Andy Burnham weighs approval.
Adura, the joint venture between Shell and Equinor, has filed environmental impact assessments for its Jackdaw and Rosebank North Sea developments. The move comes as incoming prime minister Andy Burnham faces heavy lobbying from the fossil fuel industry and political rivals to approve the drilling.
The regulatory filings have reignited a fierce debate over the actual economic returns of new UK fossil fuel extraction. Industry documents show that Jackdaw, one of the largest remaining gasfields in the North Sea, will create only 27 direct, full-time jobs.
The project's platform will be unstaffed for most of its operating life. Furthermore, Adura confirmed that a significant portion of the construction work has already been carried out in Norway, drastically reducing the scope for UK supply chain involvement compared to industry lobbying claims of thousands of jobs.
Adura defended the financial case for the fields, stating that Jackdaw and Rosebank will generate a combined gross value added of over £28bn across their lifetimes. The company projected 3,500 jobs at peak construction and claimed the projects would produce immediate tax revenues of £1.4bn before the end of this parliament.
However, campaign group Uplift challenged the fiscal math, arguing that substantial tax reliefs offered to developers will effectively cancel out those tax returns. Tessa Khan, Uplift’s executive director, claimed the British public would carry almost all of Rosebank's development costs through these breaks, enriching shareholders without lowering domestic energy bills.
The market dynamics of the extracted resources also complicate the investment narrative. Khan noted that Rosebank's output is "overwhelmingly oil for export." Fatih Birol, the world’s leading energy economist, similarly warned that opening the fields would do little to improve the UK's domestic energy security.
Adura countered that its developments would boast an emissions intensity up to eight times lower than imported liquefied natural gas. The company positioned the projects as a cleaner alternative within the highly regulated UK continental shelf.
The decision now rests with Burnham. While Labour pledged in its manifesto to halt new oil and gas licences, proponents argue Jackdaw and Rosebank can proceed because they were already in the licensing system prior to the general election. The public consultation on Jackdaw closes on August 8.
