North Sea heavyweight Ithaca Energy has said it expects to achieve strong growth in the UK despite the hike in the windfall tax and underlined its confidence in the controversial Rosebank oil field development off Shetland.
The company is investing heavily in developing the Rosebank field off Shetland with Equinor of Norway in the face of bitter opposition from environmental campaigners.
READ MORE: SNP Government credibility in tatters amid Rosebank furore
The Court of Session in Edinburgh is considering a claim by Greenpeace and Uplift that the approval of Rosebank by the former Conservative Government was unlawful.
In a call with analysts an Ithaca spokesman declined to comment on the specifics of the action.
However, he said: “We don’t see a scenario where this derails the project; maybe some additional paperwork.”
Ithaca and Equinor may be required to complete additional regulatory assessments.
The spokesman said “We believe that Rosebank is a project that will continue. We are on time and on budget”.
Ithaca noted that Equinor, which is leading work on Rosebank, still expects the field to come onstream in 2026 or 2027.
READ MORE: Rosebank oil field plan backed by Norwegian giant after tax hike
Announcing plans to pay a $200 million (£160m) special dividend to investors, Ithaca indicated that it is ready to step up investment in the UK in the expectation that it will generate attractive returns on the money spent.
The company made the announcement a month after Chancellor Rachel Reeves provoked fury in the oil and gas industry by increasing the rate of the windfall tax and scrapping the generous investment allowance that was introduced alongside it.
Industry leaders warned that the move could spark an exodus from the North Sea and that firms that remained would slash investment.
However, Ithaca made clear that it expects to be able to capitalise on any fallout from the tax changes.
The company may get opportunities to buy North Sea assets at attractive prices.
Ithaca told investors that it is “well positioned to deliver further consolidation” in the mature UK Continental Shelf basin after using acquisitions to speed growth in recent years under the ownership of Delek of Israeli.
Delek backed Ithaca to buy a $2bn North Sea portfolio from US giant Chevron in 2019 after moving in to the UK under a campaign to internationalise its operations.
READ MORE: Green energy output slump poses challenge for Scottish Government
Ithaca cemented its standing as one of the biggest North Sea players in April when it acquired the bulk of the UK portfolio developed by Italian oil giant Eni in a deal worth around £750m.
In its third quarter results announcement, Ithaca said the highly cash-generative business combination with Eni UK supports the group's "growth trajectory and attractive and sustainable returns”.
Executive chairman Yaniv Friedman said the enlarged business had significant organic growth “optionality”. The group appears confident that it will be able to increase production from its existing asset base in a way that will support growth in profits and returns to investors.
That could involve developing new fields and squeezing more out of those already in production.
Ithaca has also been working on plans to develop the Cambo find off Shetland.
The company made a profit of $182m after tax in the first nine months of the year, against $332m last time.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here