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The UK government said it will adopt a plan developed by Sir Ian Wood to maximize remaining North Sea hydrocarbon reserves and attract more investment.

Sir Ian, the retired head of the Wood Group, was asked last June by Energy Secretary Ed Davey for recommendations to enhance recovery from the UK’s North Sea assets.

The recommendations in his report would add “at least” £200 billion to the economy over the next 20 years, the government said.

A key recommendation was Wood’s call for establishment of a new oil and gas regulator to replace what he described as the under resourced and under powered Department of Energy and Climate Change.

His report also recommends:

  • Revitalizing exploration to ensure recoverable oil and gas resources in the UK are fully explored and exploited
  • Ensuring oil operators maximize economy recovery from the fields they hold licenses for
  • Developing resources on a regional basis, rather than by individual field, to maximize their value
  • Investing in prolonging the life of the existing infrastructure to process oil and gas resources
  • Exploiting the use of existing technologies to maximize recovery of oil and gas.

“The UK government can afford to support the industry and make it profitable to extract the increasingly hard-to-reach oil and gas in the North Sea,” said Prime Minister David Cameron.

“In 2012-13 the industry paid £6.5 billion in corporate taxes on production, 15% of all corporate taxes in the UK, and supports the employment of 450,000 people across the UK.,” the government said.

But UK tax revenues from oil and gas in 2012-13 were £4.7 billion lower than the year before, amounting to a 40% fall.

“The North Sea has suffered from poor stewardship from the UK government to date, and the time has come to address that,” said finance secretary John Swinney.

The report can be found here.