Its 2013 Activity Survey says: "Thousands of jobs are now being created across Britain, and the production of UK oil and gas and resulting tax revenues can now confidently be expected to rise over the coming years."
The survey shows spending hit a total £11.4 billion in 2012 and is expected to rise to at least £13bn in 2013. Investments totalling almost £100bn are now in companies' plans, highlighting the potential for the UK's offshore oil and gas sector to aid the UK's hard-pressed growth.
Malcolm Webb, chief executive of Oil & Gas, said: "After two disappointing years brought about by tax uncertainty and consequent low investment, the UK continental shelf is now benefiting from record investment in new developments and in existing assets and infrastructure.
"The recent introduction of targeted tax allowances to promote the development of a range of difficult projects, coupled with the government's ground-breaking commitment to provide certainty on decommissioning tax relief, has prompted global companies and independent businesses alike to take another look at the UK as an investment destination and resulted in a new wave of investment. It is crucial that we sustain this momentum in the years ahead."
The number of projects submitted to the Department of Energy and Climate Change and given development approval almost doubled between 2011 and 2012, and the 33 projects approved since January 2012 involve investment of £13.4 bn.
Production fell by 14% to 1.55 million boe (barrels of oil equivalent) per day in 2012, down by 14% from 2011 and by 30% from 2010. The industry says much of the fall can be attributed to "the damage done to investor confidence by the numerous adverse tax changes in the mid-2000s with new developments reaching a low point in 2008-9".
Production is likely to rise to 2 million boe by 2017.
Mr Webb said: "Only 21 exploration wells per year on average were drilled over the last three years. As a result, in 2012 not enough barrels were discovered to replace all those produced.
"However, again, there is real cause for encouragement as the survey results lead us to forecast 130 exploration wells over the next three years."