A final decision on whether the £6billion Rosebank oil development planned for west of Shetland will go ahead may not be made until 2015, it has emerged.
Austrian oil company OMV, which has a 50% stake in Rosebank, said yesterday it was working with partner Chevron to reduce the costs and hoped to reach a final investment decision next year.
Chevron later confirmed that a decision, which it had been expected to make as recently as last November, was now “unlikely” this year.
Rosebank was the first project to benefit from the UK Government’s £3billion tax allowance for fields deeper than 3,280 feet and with more than 180million barrels of reserves, announced in the March 2012 Budget.
It was expected to lead to the creation of 300 jobs out of Chevron’s Aberdeen base, and was targeting an estimated 698million barrels of oil.
Last June, Chevron said it expected drilling to start in 2015, with first production three years later.
The US firm also said Rosebank, 81 miles off Shetland, could be producing for nearly 30 years.
Contracts worth hundreds of millions were awarded for Chevron’s Rosebank and Alder projects, but in November last year the oil giant said its Rosebank plans were being put on hold as the development was not worth the investment required.
Chevron said it was continuing to work with partners OMV and Dong on the project, but that economics posed problems.
The blow came just days after Statoil said that another huge new development, Bressay, had been put on hold.
Yesterday, OMV said it was working with Chevron to find “economic value” in Rosebank, which OMV has estimated to be worth £6billion, in 2015.
Jaap Huijskes, OMV’s head of exploration and production, added: “There’s a lot of work ongoing, both to reduce the cost but also to rephase the cost to make sure that some of the drilling gets delayed to later on in the field life.”
A spokeswoman for Chevron, which owns 40% of Rosebank, said: “The project is still in the front-end engineering and design phase.
“The joint venture’s focus continues to be about making the right decisions that are not driven by schedules and timelines.
“Chevron’s view is that the project currently does not offer an economic value proposition that justifies proceeding with an investment of this magnitude.
“A final investment decision in 2014 is unlikely. Chevron continues to work with all joint venture participants to further improve the project value.”