ABERDEEN businessman Sir Ian Wood is to lead a review of the offshore oil and gas industry for the UK Government.
The independent review will look at increasing the production of oil and gas from the UK Continental Shelf.
Sir Ian – who recently retired from the Wood Group, a leading oil services company – will look at increasing investment in exploration as well as possible changes to the licensing regime and the use of up-to-date technology to recover resources from the shelf.
His review is the first in more than 20 years and will report back in the autumn before a full report is published early next year.
Energy and Climate Change Secretary Ed Davey has said that while more than 40 billion barrels of oil and gas have already been produced from the shelf, there is still a significant amount to be exploited.
He said Sir Ian would not look at changing the tax regime for the industry as there had been a number of changes in 2011. But he said the review's recommendations would be considered when the Treasury made further policy decisions.
Mr Davey said: "While investment levels are rising and the near-term prospects for the UK Continental Shelf are strong, it is one of the most mature offshore basins in the world and therefore faces unprecedented challenges that require new thinking,
"For example, declining exploration and production rates, ageing infrastructure and declining production efficiency, and the risk of premature decommissioning of key infrastructure all need to be addressed if we are to extract the maximum economic benefit for the UK.
"Government already has an excellent working relationship with the oil and gas industry through our Pilot partnership, which has made significant contributions to addressing some of these challenges over the past decade."
Mr Davey added he had come to the view that the challenges we now faced were of sufficient importance that they merited a focused, in-depth review. Such a review had not been conducted since the early 1990s, when the challenges faced were "very different to those we face now".
He added: "It is too soon to review the effectiveness of these changes and so this review will focus on other factors such as the licensing regime, optimising use of and extending life of infrastructure, production efficiency, better collaboration across the industry, increasing the exploration effort and maximising the use of enhanced oil recovery techniques.
"It will also look at the current structure, scale and effectiveness of the government stewardship regime in line with the increased technical and commercial complexity of the mature market.
Sir Ian said: "The values involved in UK oil and gas are so large that even modest increases in key production metrics over time will deliver significant economic benefits."
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