June 19, 2025

UK Treasury Set to Lose £250m on Rosebank Oil Field While Norway Makes Billions, New Analysis Warns

The UK government is on track to make a net loss of over £250 million from the controversial Rosebank project, according to new analysis from WWF Norway. The findings cast serious doubt on the economic rationale for approving one of the UK’s largest undeveloped oil fields — and raise major questions about the balance of risk and reward between taxpayers and fossil fuel companies.

In a blow to the Treasury, the analysis reveals that generous tax breaks mean that UK taxpayers would shoulder almost all of Rosebank’s development costs, while the profits flow to its owners Equinor and Ithaca Energy.

Equinor is majority-owned by the Norwegian state, while Ithaca, listed in the UK, is majority-owned by Delek Group, an Israeli fuel conglomerate. 

In a base-case scenario — assuming oil prices of $70/barrel, above where they are today — Equinor and Ithaca would earn £1.5 billion in profit, while the UK government would incur a loss of £258 million

In a lower-price scenario of $40/barrel — considered likely if countries take action to meet climate goals — UK Treasury’s losses rise sharply to £1.3 billion.

Thanks to the UK’s complex system of investment allowances, oil firms currently only cover around 16% of the capital expenditure of developing a new field, with the public shouldering the vast majority of the cost.

While the Chancellor Rachel Reeves has promised to honour existing oil and gas licences, the development and production consent for Rosebank, granted under the previous government, was ruled unlawful last September. The Scottish Court of Session overturned Rosebank’s development licence for failing to account for the emissions caused by burning its oil, following a landmark Supreme Court ruling. 

Equinor is expected to reapply for approval once the UK government finalises guidance on how it should now account for these emissions.

Rosebank’s oil is not expected to lower UK energy bills or increase energy security. It contains predominantly oil — 90% of Rosebank’s reserves are oil, not gas — which will be sold overseas as it cannot be refined here in the UK.

Read full research: Rosebank: private profit, public risk