A government commissioned report by Sir Ian Wood, former head of oil services supplier Wood Group, says in its initial findings that a new regulator should be appointed to promote cooperation between the large number of small players in the UK Continental Shelf. Improving collaboration between smaller companies and encouraging large companies to allow others to use their infrastructure could boost production by 17% above the current estimate of 18 million barrels still to be extracted from the UK sector, says the Maximising Economic Recovery for the UK report.
Mr Wood said: “It is essential for the UK’s future growth and prosperity that we maximise recovery of our offshore oil and gas resource. It is therefore crucial that industry and government act now to invest in this shared vision if they are to achieve these goals.”
The report also calls for greater cooperation between the Department of Energy and Climate Change, the Treasury and the industry.
Industry body Oil & Gas UK says a record £13.5Bn is being invested in the UK sector of the North Sea this year, but the average size of new discoveries and daily production rates are falling. The number of fields in operation has grown from 90 to over 300 since the 1990’s.
Oil & Gas UK Chief Executive Malcolm Webb welcomed the report and its recommendations. He said: “This is a changing landscape but the challenge remains constant – how to maximise economic recovery of the UK’s remaining oil and gas resource.” Mr Webb said a fundamental change in approach was needed to secure the next phase of UK offshore oil and gas development.
Government needed to move ahead swiftly if it wanted to maintain high investment in the North Sea and prevent premature decommissioning of infrastructure.