Ithaca Energy PLC (LSE:ITH) shares advanced more than 7% in Wednesday’s early deals as the company confirmed that, alongside its partners, it has now taken the investment decision to take forward the Rosebank oil field development in the UK North Sea.
The London-listed E&P owns a 20% stake in the project alongside Norwegian partner Equinor, and altogether the project is estimated to require some US$3.8 billion of investment from the partners.
It is expected that the project will lead to gross total direct investment of £8.1 billion, of which 78% is said to be destined for "UK-based businesses" to support 1,600 jobs during the peak of the construction and 450 UK jobs during the lifetime of the field.
Some 130 kilometres north-west of Shetland and designed to tap some 300 million barrels of crude, it is a major project.
According to Ithaca, the project is optimised to reduce carbon emissions with installations designed to be electrification-ready, and the companies say that they intend to pursue a regional solution for power from shore to Rosebank and nearby fields with the objective of minimising carbon emissions from production.
“We are now poised to embark on a journey that will not only provide critically important domestic energy but also ignite substantial economic impact. The Rosebank project will create thousands of jobs and contribute significantly to securing the UK's energy needs for many years to come," Ithaca chair Gilad Myerson said in a statement.
The project will be developed in two phases, with the first set to address some 245 million barrels of oil resources with wells tied to a floating production facility, with first production slated between 2026 and 2027.
As well as oil, it is expected that the field will deliver over 21 million cubic feet of natural gas per day – which Ithaca noted is equivalent to the daily use of a city the size of Aberdeen.
Alan Bruce, Ithaca's chief executive, added: “Ithaca Energy continues to deliver against its stated strategy and demonstrate its commitment to investing in the UK North Sea.
“We look forward to expanding our working partnership with Equinor to deliver one of the lowest emission intensity assets in the UK.
“The Rosebank development represents a significant investment in the UK and Scotland, and we are delighted to be supporting our local supply chain."
In London, Ithaca shares rose 11.6p or 7.11% to trade at 174.8p on Wednesday morning.