Prime Minister David Cameron will today accept all of industry veteran Sir Ian Wood’s recommendations to revolutionise the UK oil and gas sector.
Sir Ian is holding a press conference this morning to reveal the findings of his investigation into maximising recovery from the UK Continental Shelf.
He believes that an extra 4billion barrels of oil could be produced if government, industry and regulators work together.
The Press and Journal understands that he will stand by the interim findings he announced in November, when he hit out at the in-fighting between rival companies.
He described some commercial behaviour as “very damaging”.
He wants to force firms to share information – and even assets – for the greater good of the country.
Those failing to do so could face tough new penalties – and could even lose their licence.
And he wants it all overseen by a new independent regulator that can supervise licensing and ensure maximum collaboration between companies to explore, develop and produce oil and gas.
Mr Cameron will announce a package of measures this morning that will back Sir Ian’s findings.
As well as a new regulator to take over the oil and gas remit from the Department for Energy and Climate Change, he will reveal a commitment between the UK Government and the industry to ensure production licences are awarded on the basis of recovering the maximum amount of petroleum from UK waters as a whole, rather than from each individual licence block. There will also be a pledge on greater collaboration between industry and government – for example, by better sharing infrastructure, geophysical information and cutting red tape.
Mr Cameron said: “For many years, the UK has supported the North Sea oil and gas industry and we have worked together to make this an economic success the whole country can be proud of.
“I promise we will continue to use the UK’s broad shoulders to invest in this vital industry so we can attract businesses, create jobs, develop new skills in our young people and ensure we can compete in the global race.”
He said that committing to “essential steps” could be worth up to £200billion over the next 20 years.
“These steps – good for the economy and good for jobs – will increase our energy security and reduce our reliance on imported oil and gas, which is one of the main drivers pushing up people’s bills.”
Since oil and gas was first discovered in the North Sea, 42billion barrels have been recovered.
But, while the short-term prospects are good, with investment at record levels, the UK Continental Shelf faces unprecedented challenges.
Tax revenues from oil and gas in 2012-13 were £4.7bn lower than the year before – a drop of more than 40%, according to the UK Government
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