Cabinet splits over Rosebank: chancellor backs oilfield, energy secretary leans against

Chancellor John Healey is pushing to approve the Rosebank oilfield, setting up a direct clash with energy secretary Miatta Fahnbulleh, who is leaning toward rejecting the North Sea project. The licence is on hold over concerns about the project's environmental impact, and a final decision is expected before the end of the year.

The Mail on Sunday reported that Healey and Andy Burnham have agreed to try to push the project through. No 10 declined to comment on Sunday, saying the decision is a matter for the energy secretary. Fahnbulleh is ultimately in charge — but the views of Burnham and Healey will carry real weight, and the prime minister would be expected to make the final call if the cabinet conflict escalates.

Healey hinted at his position last week when he told ITV he expected oil and gas revenues to contribute to a new energy wealth fund — a signal he's anticipating income from Rosebank.

Why Jackdaw doesn't settle Rosebank

Fahnbulleh granted permission for the smaller Jackdaw gasfield earlier this month, but she told the Guardian the rationale there doesn't transfer. Her argument: the UK will rely on gas during the transition to net zero, and it's better to take it from relatively low-carbon North Sea sources than import it.

"One is a gasfield that caters for the domestic market, while the other is an oilfield that is mainly for export," she said. "It is right that we judge each application in its own right, and it is absolutely critical that the decision is consistent with our climate obligations, our carbon budgets and the end destination we need to get to with the energy transition."

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

What does this change for Labour?

Plenty. Labour MPs said on Wednesday there would be a big pushback in the party if Rosebank is approved — even though most are prepared to accept the argument that Jackdaw was a necessary part of the transition to net zero. MPs have discussed ways of forcing or encouraging a parliamentary vote on Rosebank if approval comes through, as a way of expressing dissent.

The stakes cut both ways. Rejection would be a blow for the North Sea energy industry and a major victory for climate campaigners.

A spokesperson for the Department for Energy Security and Net Zero said: "We do not comment on speculation. The North Sea remains a vital national asset, and oil and gas will continue to play an important role in our energy system for decades to come – alongside transitioning to clean power to protect jobs and tackle the climate crisis. Any decision will take into account all relevant evidence, including environmental assessments and public representations received during the consultation process."

The £2bn wealth fund at stake

Fahnbulleh has promised that future North Sea revenues will fund green energy projects through an energy wealth fund, which she said last week would be given £2bn in the budget.

"When we have tax revenues that are coming from the oil and gas industry, it is right that we invest that in the transition we need to make in energy," she said, adding that the money would go to renewables, nuclear and other clean energy schemes.

She could not say which tax revenues would flow into the fund, or how much they might generate. "The chancellor will make those details clear in the budget," she said — which means Healey controls both the fund's plumbing and, if he gets his way, the Rosebank revenues that could feed it.

For energy investors and operators, the practical question is simple: whether Fahnbulleh's climate-objection framing or the chancellor's revenue framing wins out. The answer lands before year-end.