Rosebank, 80 miles west of Shetland, contains around 300 million barrels of oil and is the UK's last major undeveloped oil site - twice the size of the controversial Cambo oil field.

The UK government says more oil will add to energy security, though the majority is expected to be sold to Europe and then reimported as refined products.

Site owners Equinor and Ithaca Energy expect to start production in late 2026. They say it could pump 69,000 barrels of oil a day at its peak - equating to about 8% of the UK's daily output - and 44 million cubic feet of gas a day.

The contentious decision is one part of a broader row over whether the UK should continue to develop new oil and gas fields, with Labour pledging to end North Sea exploration.

Energy Security Secretary Claire Coutinho said although the government is investing in renewable power, "we will need oil and gas as part of that mix on the path to net zero and so it makes sense to use our own supplies".

"We will continue to back the UK's oil and gas industry to underpin our energy security, grow our economy and help us deliver the transition to cheaper, cleaner energy," she added.

Green Party MP Caroline Lucas called the decision "morally obscene".

She said energy security and cheaper bills would be better achieved by "upscaling abundant and affordable renewables, and properly insulating the nation - ensuring clean air and water, thriving nature and wildlife, and high-quality skilled and stable jobs in the process".

Tessa Khan, executive director of campaign group Uplift, told Sky News: "We are teetering on the edge of surpassing 1.5C of warming - a limit agreed on by world leaders and essential to ensuring a habitable planet.

Yet the government allows companies like Equinor to "blow through" pollution targets "for the sake of profit."

Rosebank's "immense size, its location relative to marine protected areas, and the threat it poses to the climate have made it a lightning rod for criticism", she said.

Ithaca Energy and Equinor, the Norwegian state oil giant, expect Rosebank to bring £8.1bn in direct investment to the UK economy, and support 450 UK-based jobs during its lifetime.

A spokesperson for the regulator, the North Sea Transition Authority (NSTA), said its decision had been made "in accordance with our published guidance and taking net zero considerations into account throughout the project's lifecycle".

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Does the world need more oil?

The government recently doubled down on its commitment to hand out further oil and gas licenses for the North Sea, insisting they are compatible with climate targets and could provide greener, local sources of fuel.

If Labour wins power, the party says it would stop issuing new licences - a radical move that has drawn fury from unions.

The leading global climate science authority the IPCC, and the world's foremost energy agency, the IEA, say no new oil and gas projects can go ahead if the world is to limit warming to internationally agreed safer limits.

However, the IEA also forecasts global demand for oil to keep growing until at least 2028, and some fear cutting supply before supply falls could push up prices.

The UK's climate advisers, the CCC, expect the country to need some oil until at least 2050.

Around 80% of oil produced in the UK is exported to countries with more refining or manufacturing capacity, and then reimported as products like diesel.

Campaigners estimate that burning through that amount of oil would generate more CO2 emissions than 28 low-income countries produce in a year.

Emissions just from getting the oil out of the ground at Rosebank, before it has even been burned, would be enough to blow the rest of the emissions the UK has budgeted for from oil and gas production, according to analysis by Uplift.

The NSTA says it makes a holistic assessment of the impact of any project and the government argues that local production is greener.

The CCC says the impact on global emissions of new UK oil and gas extraction is "not clear-cut".

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Equinor says the oil will be much greener than the average for the North Sea, at 12kg CO2 a barrel vs approximately 20kg CO2 a barrel, which could fall to 3kg if it successfully electrifies operations later on.

Its spokesperson Ola Morten Aanestad said: "Equinor has a net zero plan that is in line with the Paris Agreement. There's no scenario that anybody has produced that says in 2050 there would be absolutely no need for oil and gas."

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