Prime Minister David Cameron is expected today to confirm the following package of measures aimed at maximising output from the North Sea oil and gas industry at the UK government cabinet meeting in Aberdeen.
By accepting and fast-tracking all the main recommendations of Sir Ian Wood’s review into maximising North Sea revenue, the government aims to boost oil and gas output by £200 billion over the next 20 years.
The government has already provided tax incentives to support extraction as part of its long-term economic plan – including a £3 billion allowance for large and deep fields like those West of Shetland, and a £500 million allowance for large shallow-water gas fields – and has provided certainty on decommissioning relief worth £20 billion,
The three new measures to be formally announced today include:
- a joint commitment between government and the industry to ensure production licences are awarded on the basis of recovering the maximum amount of petroleum from UK waters as a whole rather than just each individual licence block
- greater collaboration between industry and government, for example by better sharing infrastructure, geophysical information and cutting red tape
- a new independent regulator to supervise licensing and ensure maximum collaboration between companies to explore, develop and produce oil and gas.