(Bloomberg) -- The UK’s controversial Rosebank oil and gas field has received the go-ahead, despite objections from climate groups and pressure on the government to block the development.

The field won’t begin pumping oil and gas until at least 2026, and isn’t large enough to have an impact on the security of UK energy supply nor prices. However, it was seen as a test case for whether a country like the UK, which claims leadership in the area of low-carbon policies, should continue to tap fossil fuels. 

“We will need oil and gas as part of that mix on the path to net zero and so it makes sense to use our own supplies from North Sea fields such as Rosebank,” UK Energy Security Secretary Claire Coutinho said in a statement. 

Equinor ASA and partner Ithaca Energy Plc have now taken a final investment decision to proceed with Rosebank, together investing $3.8 billion, following approval from the North Sea Transition Authority, according to a statement from the companies on Wednesday. Ithaca shares jumped 7.2% and Equinor rose 1%.

The field is located about 130 kilometers (81 miles) northwest of the Shetland Islands, with total recoverable resources estimated at around 300 million barrels of oil, according to Equinor’s website. Its crude will be transported to refineries by shuttle tankers and the gas will be shipped to mainland Scotland by pipeline.

The UK North Sea was first tapped in the 1960s and production has been in decline for more than 20 years. That has accelerated in recent years due to lack of investment, with flows through the region’s most important pipeline system down 40% in the last six years, according to operator Ineos. 

Permission for the development is consistent with longstanding UK government policy to continue tapping fossil fuels beneath the North Sea, but comes at a time of growing tension between energy security and action against climate change. 

Last week, Prime Minister Rishi Sunak rolled back several measures that are part of the push for net zero emissions by 2050. In France, President Emmanuel Macron’s government will present a budget on Wednesday that will test voter appetite for investing in the low-carbon transition at the same time as high energy prices hurt inflation-hit households.

Dozens of climate groups and European Union lawmakers this year had urged the UK government to scrap plans for Rosebank, which is the largest untapped resource in the country.

“We know that relying on fossil fuels is terrible for our energy security, the cost of living, and the climate,” Philip Evans, Greenpeace UK’s climate campaigner, said in a statement. “This decision is nothing but carte blanche to fossil fuel companies to ruin the climate.”


(Updates with chart of UK oil production)

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