Norwegian petroleum company Equinor and British oil and gas company Ithaca Energy have reached a final investment decision (FID) for the $3.8bn first phase development of the Rosebank field.

The North Sea Transition Authority (NSTA) has approved the development of the Rosebank field, located around 130km northwest of Shetland, on the UK Continental Shelf (UKCS).

It will be developed with the subsea wells tied back to a redeployed Floating Production Storage and Offloading vessel (FPSO), with plans to begin operations in 2026-2027.

The FPSO has been designed to be electrification-ready and is working together with the government and industry to pursue a regional power solution for the project.

The project is expected to create around 1,600 jobs during the peak construction period, and continue to support around 450 UK jobs during its lifetime, said Equinor.

Equinor projects, drilling and procurement executive vice president Geir Tungesvik said: “Developing the Rosebank field will allow us to grow our position as a broad energy partner to the UK while optimising our oil and gas portfolio, and increasing energy supply in Europe.

“Rosebank provides an opportunity to develop a field within the UK Continental Shelf which will bring significant benefits to Scotland and the wider UK.”

Equinor International exploration and production executive vice president Philippe Mathieu said: “We look forward to collaborating closely with our partner and suppliers to develop and operate Rosebank with the lowest possible carbon footprint while bringing the maximum value to society in the shape of UK investment, local jobs and energy security.”

The Rosebank field is estimated to host a total recoverable resource of around 300 million barrels of oil, with the first phase of development targeting 245 million barrels of oil.

It is being developed under the North Sea Transition Deal, an agreement between the UK government and the offshore industry, signed in March 2021.

The oil produced will be transported to refineries via shuttle tankers, and gas to mainland Scotland through the West of Shetland Pipeline system.

TechnipFMC has been awarded a $500m integrated engineering, procurement, construction and installation (iEPCI) contract for subsea production systems, umbilicals, risers and flowlines.

Odfjell Drilling has been awarded a $328m rig contract, which includes the integrated services, modifications and options.

The well services company will deploy the Deepsea Atlantic mobile rig, which will start a seven-well drilling campaign in the second quarter of 2025, with an option for four single wells.

In addition, Altera has been awarded a nine-year bareboat charter and an operations and maintenance contract related to the Petrojarl Knarr FPSO, with options to extend up to 25 years.

Equinor UK upstream senior vice president Arne Gürtner said: “We know that the world needs to transition to new, cleaner energy systems and our broad energy investments into the UK support this.

“And while we do this there is going to be a continued need for oil and gas, which currently meets 76% of the UK’s energy needs.

“Our decision to progress the Rosebank development is the result of work and collaboration by our employees, partners, government, regulators, and other stakeholders to ensure that this development is able to help meet this ongoing need, with the lowest carbon footprint possible.”