A court in Scotland blocked the production of oil and gas on Thursday at two large project sites being developed in British waters until their impact on climate change can be assessed.
The decision was a blow for the sites’ developers, Shell and the Norwegian company Equinor, which have already spent or committed hundreds of millions of pounds for the projects. But Judge Andrew Stewart of Scotland’s Court of Session said that the companies could continue to drill wells and perform other work at the sites until the government made a decision on whether they could produce oil and gas.
The oil and natural gas fields, called Jackdaw and Rosebank, are seen as tests for the flagging British oil industry because of their size and because Shell and Equinor are two of Europe’s largest energy companies.
Uplift, an environmental group, which joined Greenpeace in a lawsuit to stop production, called the ruling “a significant win.”
The ruling shows the extent that activist groups are able to use the courts in Britain to block or hamper activities such as drilling for oil and gas that they say could threaten the environment.
The oil companies welcomed the judge’s concession that allows them to proceed with some work, but Shell issued a reminder of how much was at stake.
“We have spent more than £800 million since the regulator approved Jackdaw in 2022,” Shell said in a statement. “Swift action is needed from the Government so that we and other North Sea operators can make decisions about vital U.K. energy infrastructure.”
Shell added that Jackdaw could produce enough fuel to heat 1.4 million homes at a time when other fields are nearing the end of their productivity.
Equinor said it had already lined up £2.2 billion in contracts for Rosebank, a large oil field with an estimated 300 million barrels of oil and gas. The energy giant said it planned to invest £10 billion in Britain in the next few years, with much of that going to the wind and carbon capture industries that the British government is promoting.
The Labour Party government of Prime Minister Keir Starmer is pushing hard for investment to strengthen Britain’s economy, yet it remains to be seen whether the oil and gas industry will be part of these efforts.
The government is reconsidering its permitting procedures in light of a 2024 ruling by Britain’s Supreme Court that the assessments of oil and gas projects must include the impact that burning the fuels have on the climate. New guidelines are expected later this year.
In his ruling on Thursday, Judge Stewart followed the Supreme Court, saying that the two projects in the North Sea should be suspended to give the government time to develop criteria to assess their impact on the climate.
Ithaca Energy, a minority partner in Rosebank, argued in the case that suspension of the project “would affect the international perception of the U.K., including its reputation for inward investment.”
But Judge Stewart did not seem to be persuaded by that argument. “The public interest in authorities acting lawfully and the private interest of members of the public in climate change outweigh the private interest of the developers,” he said in his ruling.
