Oil & Gas UK Economic Report 2014

4. The UK’s Continental Shelf

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The Wood Review

The the recommendations of the Wood Review and announced that the new, better resourced regulator will be called the Oil and Gas Authority. At the time of writing (July 2014), this new regulator is in its formative stages, with DECC undertaking the necessary legislative steps and sourcing of a chief executive. government has accepted Output from the UKCS did not peak until the year 2000, confounding all predictions when production of North Sea gas and, subsequently, oil began from the West Sole field in 1967 and the Argyll field in 1975, respectively. Although production has declined steadily since, the UKCS continues to satisfy around half of domestic oil and gas demand and is expected to continue to supply close to 50 per cent in 2020. Reserves and Resources

In June 2013, the British Government commissioned an independent review of the UKCS, to be led by Sir Ian Wood, with the objectives of examining the main factors affecting the industry’s current performance and making recommendations for achieving maximum economic recovery of oil and gas. An interim report was published in November 2013 and the final report 3 in February 2014. The review’s principal recommendations were that: i. The government (HM Treasury, as well as the Department of Energy & Climate Change (DECC)), the industry and a new regulator should develop and commit to a tripartite strategy for maximising the economic recovery of oil and gas from the UKCS (to be known as MER UK). ii. An arm’s length and properly resourced regulator should be created and charged with the stewardship of the UKCS’ resources and regulation of the industry so as to achieve MER UK. iii. The industry should commit to a high degree of collaboration on the UKCS.

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3 The final report, UKCS Maximising Recovery Review , is available to download at www.woodreview.co.uk

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ECONOMIC REPORT 2014