Cabinet Split in Britain Over the Rosebank Oilfield: Chancellor in Favour, Energy Secretary Leaning Towards Rejection

A cabinet split has emerged in Britain over whether to approve drilling at the controversial Rosebank oilfield, with the chancellor, John Healey, in favour of the North Sea project.

The energy secretary, Miatta Fahnbulleh, is ultimately in charge of the decision, and she was reported last week to be leaning towards rejecting it after granting permission for the smaller Jackdaw gasfield. The licence is on hold over concerns about the project's environmental impact, and Healey is understood to back approving it.

The chancellor hinted at his support last week when he told ITV he expected oil and gas revenues to contribute to a new energy wealth fund, suggesting he was anticipating income from Rosebank. The prime minister would be expected to make the final call if there is conflict on the decision.

No 10 declined to comment on Sunday after the Mail on Sunday reported that both Andy Burnham and Healey had agreed to try to push the project through, saying it was a matter for the energy secretary. Fahnbulleh is responsible, but the views of Burnham and Healey will hold weight in the choice.

Fahnbulleh said the rationale behind Jackdaw did not apply to Rosebank, saying the UK would rely on gas as it made the transition to net zero and that it would be better to take it from relatively low-carbon sources in the North Sea than importing it. She said one is a gasfield that caters for the domestic market, while the other is an oilfield mainly for export, that each application should be judged in its own right, and that the decision must be consistent with climate obligations, carbon budgets and the end destination of the energy transition.

If Rosebank is rejected, it would be a blow for the North Sea energy industry and a major victory for climate campaigners. A final decision is expected before the end of the year.

Labour MPs said on Wednesday that there would be a major pushback in the party if Rosebank was approved, though most are prepared to accept the arguments that Jackdaw was a necessary part of the transition to net zero. MPs are understood to have discussed ways of forcing or encouraging a parliamentary vote on Rosebank should it be approved, as a way of expressing dissent.

Officials say Fahnbulleh has not yet made her decision. Rosebank would produce emissions about seven times greater than Jackdaw, and she is understood to believe it would do less for UK energy security, given that most of the oil would be exported.

A spokesperson for the Department for Energy Security and Net Zero said they do not comment on speculation, that the North Sea remains a vital national asset, and that oil and gas will continue to play an important role in the energy system for decades alongside the transition to clean power. Any decision will take into account all relevant evidence, including environmental assessments and public representations received during the consultation process, the spokesperson said.

Fahnbulleh has promised that future revenues from the North Sea will be spent on green energy projects through an energy wealth fund. She said last week the fund would be given £2bn in the budget and that tax revenues from the oil and gas industry would be invested in renewables, nuclear and other clean energy schemes. She could not, however, say exactly which tax revenues would go to the fund or how much that might generate; the chancellor will make those details clear in the budget, she said.