The US oil giant says it may not be viable to proceed with the Rosebank project, one of the biggest oil developments in UK waters.
US oil giant Chevron has warned it may not be economically viable to proceed with a planned $10bn North Sea oil project, in a blow to hopes of a revival in the region.
Chevron said that the Rosebank project “does not currently offer an economic value proposition that justifies proceeding with an investment of this magnitude”, amid rising costs of drilling.
The project, which has been under consideration for a decade, had already been handed tax breaks from the government in the hopes it would make it viable. The disclosure that even these incentives may be insufficient is a blow to government hopes to stem steep declines in North Sea output.
“Rosebank has always been a challenging project. At present, the cost of doing business continues to rise,” a Chevron spokesman said.
The Rosebank field, 80 miles north-west of the Shetland Islands, lies in water depths of 3,600 feet and will require a floating production, storage and offloading vessel.
It is thought 240m barrels of oil could be recovered from the field.