OBR Budget Forecasts Count Rosebank Revenue Before Approval; Lords Minister Says Figures Would Be Republished if Refused

Since Fahnbulleh approved the Jackdaw gas field on Oct. 21 and Healey delivered his first Budget on Oct. 28, attention has turned to what the Budget's own arithmetic assumes about the next North Sea decision. It assumes a lot.

The OBR's economic and fiscal outlook, published alongside the Budget, builds in tax receipts from the "development of new fields." That includes Rosebank, which has not been approved, and unspecified future discoveries. The forecast draws on estimates from the North Sea Transition Authority (NSTA).

What the forecast assumes

The NSTA puts roughly 1.2 billion barrels of oil and gas equivalent in its category of "prospective resources," its best guess at untapped reserves within existing licences. City AM reported that the OBR's figures rest on all of that being developed.

The OBR expects oil and gas production to decline by about 10% a year between 2027 and 2031 with new fields in the mix. It warned the annual decline could reach 14% if licensed new fields produce nothing.

The tax take is modest either way. The OBR forecasts £5.1 billion from oil and gas taxes in 2026-27, falling to £1.9 billion by 2028-29 and "close to zero" by 2031-32, once the Energy Profits Levy expires.

City AM reported that a shortfall in approvals could leave a multibillion-pound hole in the public finances. The OBR has not published such a figure in the material released with the Budget.

The Lords answer

Baroness Curran was asked about it in the House of Lords today. "The OBR will have to republish the figures if Rosebank does not go ahead and it will need to be addressed," she said.

She added that Fahnbulleh will grant or refuse consent "on the facts" of the case.

A Treasury spokesperson said the OBR makes assumptions about future North Sea production when forecasting revenues, and that Rosebank has been included in government forecasts since at least 2019. The spokesperson called that "entirely separate" from the Energy Secretary's independent decision on the project.

That is the government's strongest defence: the forecast is a long-standing modelling convention, not a decision. It is also true that the Budget numbers now carry an assumption that a minister has said will have to be revisited if the answer is no.

Policy and politics

Approving new fields would not breach the 2024 Labour manifesto pledge to ban new exploration licences, since Rosebank and Jackdaw were licensed years ago. Both projects were held up for years in court. Fahnbulleh and Prime Minister Andy Burnham have each called the consultation process "quasi-judicial."

Fahnbulleh said Jackdaw would "support the country's energy security with homegrown gas." The government says it will raise domestic gas output by about 6% at peak and add an estimated £2.9 billion to the economy. Healey called it "a pragmatic, common-sense decision." Burnham said Britain will still need oil and gas "for decades to come" even on the path to net zero by 2050.

Climate campaigners reject that logic. Caroline Rance, head of campaigns at Friends of the Earth Scotland, told The National: "Rosebank cannot be approved if the UK Government is to retain any shred of credibility on climate." She said members of Burnham's government are "lobbying hard to intensify this harm."

The National also reported that the Cabinet is split. According to its account, Healey, Burnham and Business Secretary Jonathan Reynolds favour approval, while Fahnbulleh and Foreign Secretary Ed Miliband are understood to oppose it. The government has not confirmed this.

SNP MP Chris Law raised another objection in the Commons. He said Delek Group, which has been flagged by the UN over human rights concerns, could receive more than £200 million through its majority stake in Ithaca Energy if Rosebank is approved. Miliband replied that the government does "not talk about specific companies in relation to sanctions" before acting.

Money elsewhere in the North Sea

The Budget did not bring forward changes to the Energy Profits Levy despite repeated calls from the sector. It also changed funding for the Acorn carbon capture project at St Fergus, near Peterhead.

The £200 million pledged last year will no longer come as grant funding. It will be "reprofiled" as financial transactions, meaning loans. Budget documents say the Department for Energy Security and Net Zero is "reprioritising its budget to contribute towards the defence investment plan."

On the revenue side, Healey announced an Energy Wealth Fund with a £2 billion down payment to reinvest oil and gas revenues in the climate transition.

What comes next

Campaigners had expected a Rosebank decision in December, after the UN climate talks. Fahnbulleh has given no date. If she refuses consent, Curran's answer commits the government to returning to the OBR's numbers. If she approves, the forecast will already have priced it in.