Changes to the way the oil and gas sector operates could produce at least three to four billion additional barrels of oil over the next 20 years, a report claims.

A review of the industry, by Sir Ian Wood, the recently retired chair of the Wood Group, called for a new focus on maximising the potential of the UK Continental Shelf (UKCS) waters around the UK.

The interim report recommends a new regulator for the industry, saying the current one is "no longer adequate" to meet the challenges of managing an "increasingly complex" sector.

Implementing the recommendations has the potential to produce "at least" the equivalent of an extra three to four billion barrels of oil from the UKCS, the report claims.

This would be worth approximately £200 billion to the UK economy, the report says.

It highlights the "substantial contribution" the oil and gas industry makes to the economy, employment and energy security, with the sector said to support 450,000 jobs across the UK both directly and indirectly.

The equivalent of 41 billion barrels of oil have already been produced from the UKCS, with an estimated equivalent of 12 to 24 billion barrels still to come.

"Ultimate recovery is in a large part dependent on how well the UK manages the development of remaining reserves," the report insists.

The sector faces a number of challenges in the future, with any newly discovered oil and gas fields generally smaller and harder to exploit, while some of the operating equipment is more than 30 years old and is now at or beyond the end of its original intended lifespan.

Production has fallen by 38% in the last three years, resulting in £6 billion less in tax receipts for the Treasury, while a decline in exploration led to the equivalent of less than 50 million barrels of oil being discovered last year.

"It is essential for the future growth and prosperity of the UK that the recovery from both existing fields and new discoveries is maximised," the report says.

"To achieve this goal, there now needs to be a radical step-up in how government exercises stewardship of the UKCS."

There is a "lack of focus on maximising economic recovery for the UK" because operators have pursued individual commercial objections in isolation, with only a limited shared commitment to maximising recovery across parts of the UKCS, according to the report.

It also claims that the current regulator, part of the UK Government's Department of Energy and Climate Change, is "significantly under-resourced and far too thinly spread to respond effectively to many of the demands of managing an increasingly complex business and operating environment".

The creation of a new arms-length regulatory body is recommended. This should, as a priority, work with the industry to develop strategies for exploration, technology including enhanced oil recovery and carbon capture and storage, and decommissioning.

The UK Government and the industry have also been urged to develop and commit to a strategy of maximising economic recovery from the UKCS.

"The UKCS should be an attractive destination for investment, with significant opportunities still to be developed," the report says.

But "changes need to be made urgently to meet the Government's objective of maximising economic recovery from the UKCS, ensure the long-term health of the UKCS and reverse recent declines in performance".

All future licences for oil and gas developments should include a clause "making clear that in all areas of development and operation, the licence holder must act in such a way that would be consistent with the principle of maximising economic recovery", according to the report.

The UK Government charged Sir Ian in June with looking at how best to ensure the longevity of the UK oil and gas industry.

Commenting on the interim report, Energy Secretary Ed Davey said: "Our offshore oil and gas fields are one of Britain's great natural assets, and I'm determined that they should stay that way. They are good for our energy security because if we improve what we're recovering domestically, we reduce our reliance on foreign imports.

"They are good for the economy, supporting jobs and thriving communities. And they are extremely good value for taxpayers.

"There are people who would try to talk down their untapped potential but today's report shows that with strong, co-ordinated stewardship by the UK Government, working in partnership with world-class operators, we can boost future returns by at least £200 billion, and potentially much more.

"This report has given Government and industry alike plenty to think about, and I'm looking forward to receiving Sir Ian's report and setting out our plans to make the most of our offshore oil and gas fields in the new year."

Scottish Energy Minister Fergus Ewing said the Scottish Government is "fully behind Sir Ian Wood's report".

He said. "We believe it is essential that the recommendations are implemented with speed, and a shadow body be set up rather than await the outcome of primary legislation.

"We share Sir Ian's view that the industry should finance this body and since most of the developments in the North Sea and west of Shetland are managed from Aberdeen, Europe's oil and gas capital, we believe the only conceivable principal location for the new regulatory body is in Aberdeen.

"Sir Ian's report estimates that the prize from increased and effective collaboration could be an additional 3-4 billion barrels of oil equivalent over 20 years, which could be worth £200 billion. By addressing the challenges facing the industry and harnessing the opportunities, enormous benefits can be reaped by the industry and in tax revenues.

"This was recognised by the Scottish Government in our Oil And Gas Strategy, published in May 2012, and in our paper Maximising The Return From Oil And Gas In An Independent Scotland, published in July 2013."

Shadow energy minister Tom Greatrex said Sir Ian's report "rightly calls attention to the need for cooperation and wider consultation in order to get the most from the remaining resources in the North Sea".

He said: "That is something that many parts of the sector have developed in recent times but, as Sir Ian makes clear, there is much more that can be done. Oil is by definition a declining resource and by record a volatile one, so care and attention is required.

"Given the global nature of this business, fragmentation of fiscal and regulatory regimes through separate arrangements in Scotland from the rest of the UK would increase risk, reduce efficiency and minimise the chances of achieving the goals this interim report sets.

"This interim report and the subsequent full report will be important factors to consider as industry, workforce and Government collaborate for the future of an important sector in the Scottish and UK economies."

But WWF Scotland director Lang Banks said: "There is something deeply worrying about publishing a report that aims to squeeze even more oil and gas out from beneath the North Sea just as delegates gather for UN talks to discuss ways to tackle climate change by reducing our dependency on fossil fuels.

"To reduce the risk of dangerous global climate change, the vast majority of known fossil fuel reserves need to be left in the ground and not exploited.

"While it's true that the oil and gas industry will continue to be a major contributor to our economy for some time, we should urgently be setting out a plan to sensibly transition away from dirty fossil fuels. We need to see a transition that enables us to harness the engineering skills currently deployed in the oil and gas industry and apply them to supporting a range of cleaner forms of energy production.

"The impacts of climate change will have a detrimental impact on entire economies as well as our environment. One thing we do know is that the planet certainly can't afford to allow all the oil left in the North Sea to be burned.

"It's time we started talking about leaving fossil fuels in the ground, not how to find even more."

Friends of the Earth campaigner Simon Bullock also questioned the aim of the report.

"As the international community gathers in Poland for urgent talks on tackling climate change, this Government-commissioned report calls for the UK's offshore oil and gas production to be maximised," he said.

"If we want to avoid catastrophic climate change, the world can't burn more than a third of even its existing fossil fuel reserves.

"Ministers must stop giving tax breaks to explore for even more gas and oil we can't afford to use.

"The best way to secure the UK's energy security is through a massive programme to cut energy waste, such as insulating homes, and developing our massive home-grown renewable power potential."