UK Greenlights $3B Jackdaw Gas Project

SUBSCRIBE SEARCH ARTICLES NEWS UK Energy Secretary Miatta Fahnbulleh has greenlit the Jackdaw gas field. Image by Georg Hummer via iStock

UK Energy Secretary Miatta Fahnbulleh has greenlit the Jackdaw gas field, a statement posted on the UK government website today revealed.

Jackdaw will start to supply gas to British homes and businesses from the end of this month after Fahnbulleh agreed that the regulator - the North Sea Transition Authority (NSTA) - can grant consent for gas to be produced at the field, according to the statement.

The statement noted that the Jackdaw decision is expected to increase domestic gas production by around six percent at its peak, “supporting the UK’s gas supply over its lifespan of up to 11 years, boosting our energy security, protecting hundreds of jobs, and adding an estimated GBP 2.9 billion [$3.8 billion] to the UK economy”.

This statement highlighted that recent events in the Middle East “have triggered global energy shocks and pushed up bills for families across the country”. It pointed out that, “at a time of global instability, homegrown energy can be a source of national strength”.

Jackdaw’s green light comes as the UK Chancellor of the Exchequer, John Healy, announced a new Energy Wealth Fund, which the statement said will use tax revenues from North Sea oil and gas to invest in renewable and low carbon energy projects and “support the green transition”. 

“Reflecting our commitment to the North Sea, this will start with an initial GBP 2 billion [$2.6 billion] injection of funding, with future revenues from the North Sea flowing into the fund over time,” the statement revealed.

The UK government highlighted in the statement that it “remains committed to the green transition and net zero” but noted that, “even on the path to net zero, the UK will still require oil and gas as part of our energy needs for decades to come”. Fahnbulleh pointed out in the statement that the Jackdaw project will not prevent the UK from being able to meet its legally binding limits on carbon emissions and achieve net-zero by 2050.

Advertisement - Scroll to continue

“The decision is consistent with the government’s manifesto commitment not to issue any new licenses to explore new fields while managing existing fields for the entirety of their lifespan,” the statement said.

“The Jackdaw gas field is already licensed and the North Sea Transition Authority’s decision to grant consent now gives the developer the green light to begin operations at the field,” it added.

“It follows the Supreme Court’s ruling on the Finch case in 2024, which means North Sea operators are now required to consider the impact of burning the extracted oil and gas in environmental impact assessments,” it continued.

“This meant the Energy Secretary had to consider a new environmental framework alongside all relevant factors in the case, including responses to the public consultation,” it went on to state.

Fahnbulleh said in the statement, “following careful consideration of all relevant factors I have agreed that the regulator can grant consent for gas to be produced at Jackdaw, which will begin to supply the UK with gas from this winter thanks to the highly skilled and vital North Sea workers”.

“This decision will support the country’s energy security with homegrown gas this winter and help minimize the UK’s use of imported higher emission fuels as we continue our transition to renewables and nuclear,” Fahnbulleh added.

“The decision is compatible with our legally binding climate commitments, and we remain resolute in ending new licenses for oil and gas and achieving net zero by 2050,” the Energy Secretary continued.

Healey said, “I want Britain’s energy wealth to spark a new wave of clean power to work for the British people”.

“Since North Sea gas and oil were discovered decades ago, the benefit of our existing nation’s natural resources have not been turned into the long-term investment our country needs,” he added.

“Through our new Energy Wealth Fund, we will invest in the clean energy industries of the future, creating jobs, driving growth and strengthening Britain’s energy security,” Healy noted.

UK Prime Minister Andy Burnham said in the statement, “I welcome the Energy Secretary’s decision, which will protect hundreds of jobs and help keep millions of homes warm this winter”.

“At a time when people are really struggling, it’s right that we look in a responsible way at maximizing the existing energy reserves we have in Britain that could help,” he added.

“We’re committed to moving towards renewable energy and reaching net zero by 2050. But even on our ambitious climate path, we’ll still require oil and gas as part of our energy needs for decades to come,” he stated.

“That’s why we’re taking a pragmatic approach to the North Sea. We’re also establishing a new Energy Wealth Fund to invest in renewable energy, support the green transition and help reduce energy bills over the long-term,” he continued.

“Our approach will ensure we can boost our energy security, back British workers, ringfence future North Sea proceeds to speed up the green transition, hit our ambitious climate targets and - crucially - bring down bills,” he went on to state.

Secretary of State for Scotland Douglas Alexander said, “this decision to approve Jackdaw is a win for Aberdeen, a win for Scottish workers and a win for Britain’s energy security”.

“The North East has helped power the country for half a century and will continue to do so for decades to come,” he noted.

“This will harness the homegrown skills and assets we have in Scotland and right across the UK in a boost for the economy, as we continue to invest in and grow clean energy resources, and work towards the transition,” he added.

Robust Scrutiny

In a statement sent to Rigzone this morning, the NSTA announced that it had granted development and production consent to Adura for the Jackdaw field, which is located off the coast of north-east Scotland. 

Consent was given to the owner of the asset, “following the SoS’ consideration of the company’s Environmental Statement and agreement to the grant of consent”, the statement revealed. 

“After robust scrutiny we have today granted consent for the Jackdaw Field development which allows the owners to proceed with their project and produce gas from the field upon completion of development work,” NSTA Chief Executive Stuart Payne said in the statement.

“This project will support the UK’s energy security by providing domestically produced gas, generate tax revenues, safeguard supply chain jobs, use existing infrastructure, and have an emissions intensity well below the UK average,” he added.

“Now is the time to move forward at pace and we welcome the government’s approval in allowing us permission to consider a small number of new out of round licenses ahead of forthcoming legislation”.

Adura welcomed the UK government’s decision to approve the Jackdaw gas field in a statement posted on its website on Wednesday, describing it as “an important step forward for the future of UK energy”.

“The decision follows a rigorous regulatory process led by the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED), including an extensive public consultation and consideration of the latest environmental evidence,” Adura said in its statement.

Jackdaw could produce enough gas to heat the equivalent of around 1.4 million UK homes at peak production, according to this statement, which also pointed out that the asset can support skilled employment and businesses across the UK supply chain and make a “material contribution” to Britain’s domestic energy supply.

“This decision is an important and positive step forward for Adura and for the future of UK energy,” Adura CEO Neil McCulloch said.

“It provides certainty to the businesses and skilled workers already delivering the project and demonstrates the value of pragmatic, evidence-led decision-making,” he added.

“Our attention now turns to Rosebank. It follows Jackdaw in the regulatory process, but the case for approval is equally strong. We believe that applying the same rigorous, evidence-based approach can lead to a similarly positive decision,” he continued.

Wider Pipeline

In another statement sent to Rigzone today, industry body Offshore Energies UK (OEUK) said the green light for the GBP 2.1 billion ($2.8 billion) Jackdaw gas project “is a first step towards unlocking GBP 50 billion [$66.9 billion] of investment in new North Sea oil and gas production to help meet UK demand”.

OEUK said Jackdaw will be among the lowest-emission developments in the UK North Sea, with production emissions around half the UKCS average and approximately eight times lower than imported liquified natural gas.

“Approval of Jackdaw is an important step forward, but the bigger opportunity is unlocking the wider pipeline of more than 100 North Sea projects, including the Rosebank oil field,” OEUK said.

“These projects will support thousands of jobs, strengthen UK energy security and reduce growing reliance on imported energy,” it added.

The UK currently relies on imports for around 40 percent of its energy needs, OEUK highlighted in the statement, warning that this dependence “is set to grow unless we invest in domestic supply”.

“Latest forecasts suggest the UK will still require more than 10 billion barrels of oil and gas between now and 2050, even as we accelerate the transition to lower-carbon energy sources and net zero,” OEUK pointed out.

“The offshore energy sector has repeatedly demonstrated that, in the right fiscal and regulatory environment there are significant investment opportunities to support jobs, strengthen the UK supply chain and deliver economic value across the country,” it added.

“Unlocking this wider pipeline could bring forward more than three billion barrels of additional domestic production, helping the UK meet at least half of its oil and gas demand up to 2050 from homegrown resources rather than imports,” it continued.

The industry body highlighted that any future production from the UK Continental Shelf would proceed following approval under a regulatory regime that incorporates Scope 3 emissions into decision-making and is consistent with the UK’s climate goals.

In its statement, OEUK revealed that, ahead of next week’s budget, the industry body is calling for the introduction of the Treasury’s proposed Oil and Gas Revenue Levy (OGRL), which the group described as a permanent windfall tax triggered during periods of high prices, which it said would provide “the stable and predictable fiscal framework needed”.

“Industry analysis shows that introducing the OGRL in 2027 and unlocking additional investment could generate GBP 14.9 billion [$19.9 billion] in additional tax revenues over the next decade, while strengthening energy security, supporting jobs and reducing reliance on imports,” OEUK said.

In this statement, OEUK CEO David Whitehouse said, “the Prime Minister has said the question is not whether we use oil and gas, but where it comes from”.

“The answer, surely, is our own North Sea, where it is produced under some of the highest environmental standards in the world, supporting UK jobs, creating value across the UK economy and sustaining the supply chain needed to deliver our energy future,” he added.

“Today’s decision on Jackdaw is an important step forward. But securing Britain’s energy future means unlocking a wider pipeline of North Sea projects that could deliver GBP 50 billion of investment, strengthen energy security, support jobs and supply chains across the UK, and help meet more of the country’s future energy needs from domestic production rather than imports,” he continued.

“Britain spent GBP 84 billion [$112.4 billion] on energy imports last year, equivalent to almost three percent of GDP. That means jobs, investment and economic value flowing overseas. The right choice is to back domestic production from the North Sea, not greater dependence on imports,” he went on to state.

“We want the UK government to support domestic production over imports, and approval of Jackdaw is a step in that direction,” he noted.

Correct for Climate Targets, Economy

In a press note sent to Rigzone on Wednesday, Wood Mackenzie said its analysis shows that the Jackdaw field consent is “correct for UK climate targets and the economy”.

 “The decision ends a process dating back to January 2025, when a judicial review suspended the original 2022 development consent on the grounds that scope 3 emissions had not been fully considered,” Wood Mackenzie highlighted in the note.

“The regulator accepted Adura’s submission that Jackdaw’s climate impact is not significant and will not materially affect the UK’s climate change commitments,” it added.

“Wood Mackenzie’s P50 estimate puts total greenhouse gas emissions over the field’s nine-year life at 24 MtCO2e, equivalent to 1.8 percent of remaining UKCS emissions,” it continued.

Wood Mackenzie projected in the note that Jackdaw production in 2027 will average 140 million cubic feet per day, or six percent of UKCS gas supply. The company said that replacing Jackdaw’s output with an equivalent volume of U.S. LNG would have resulted in a net increase of 3.5 MtCO2e in scope 1 and 2 emissions.

“The UK Climate Change Committee is clear that meeting carbon budgets requires reducing fossil fuel demand through accelerating the uptake of EVs, heat pumps, and wider electrification,” Wood Mackenzie pointed out.

“Blocking domestic gas supply would not have advanced that objective,” it added.

Wood Mackenzie estimated that, for Adura, Jackdaw will generate GBP 430 million of post-tax cash flow in 2027 alone, “while … higher prices help lift the project IRR from nine percent to over 14 percent”.

Had approval been withheld, Wood Mackenzie assessed that over GBP 20 billion ($26.7 billion), real terms, of future UKCS greenfield investment “would very likely have been lost, along with the industry’s confidence in the consent process”.

“Blocking Jackdaw would require the UK to import more emissions-intensive LNG to meet UK gas demand,” Gail Anderson, Research Director, North Sea Upstream at Wood Mackenzie, said in the press note.

“We estimate that would have increased net emissions by 3.5 MtCO2e, not reduced them. The correct way to tackle the climate crisis is to reduce demand for oil and gas,” Anderson added.

“At current prices, Jackdaw could generate GBP 1.5 billion [$2.0 billion] in vital tax receipts for the Treasury. Blocking it would have seen these revenues go elsewhere, while over GBP 20 billion of future greenfield UKCS investment would very likely be lost,” Anderson continued.

“These are compelling reasons why North Sea production should remain a vital part of the UK’s energy mix,” Anderson went on to state.

Approval Reactions

In another statement sent to Rigzone today, a spokesperson for UK headquartered global petrochemicals manufacturer INEOS said the Jackdaw approval is welcome but added that the government “must stop taxing the North Sea into decline”.

“Approving Jackdaw is the right decision, but this does not stop the damage being done to the North Sea. And it appears Rosebank remains stuck in political limbo,” the spokesperson said.

“The North Sea Levy must be amended in the Budget. This punitive tax has been an abject failure, even as a tax-raising mechanism,” the spokesperson added.

“Tax receipts are going down, not up, while imports increase. The government is driving away the very investment that generates jobs, production and tax revenues. It makes no sense,” the spokesperson continued.

“Maintaining this punitive 78 percent tax in Budget will compound the mistake. It will leave an even bigger black hole in future Budgets,” the spokesperson warned.

Britain will need oil and gas for decades, the INEOS spokesperson said in the statement, adding that “we can produce it here, creating British jobs and generating billions in tax revenues, or continue to increase imports from overseas and send those benefits abroad”.

“There is still a chance in the upcoming budget to get back to a sensible energy policy and tax regime,” the spokesperson concluded.

In a statement posted on his X page on Wednesday, UK Green Party Leader Zack Polanski criticized the UK government’s approval of Jackdaw.

Rigzone contacted the UK Department for Energy Security and Net Zero (DESNZ) and HM Treasury (HMT) for comment on OEUK's statement. HMT redirected Rigzone to DESNZ, which has not replied to this Rigzone comment request at the time of writing. Rigzone also contacted DESNZ and HMT for comment on INEOS' statement, and DESNZ for comment on Adura’s statement. At the time of writing, neither has responded to these Rigzone requests.

To contact the author, email [email protected]

What do you think? We’d love to hear from you, join the conversation on the Rigzone Energy Network.

The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.

MORE FROM THIS AUTHOR Andreas Exarheas
Editor | Rigzone