The UK Government is to contribute £15 million short-term funding over five years to help kickstart the establishment of a new arm’s length regulatory body, to be called the Oil and Gas Authority (OGA), based in Aberdeen, to oversee the oil and gas industry.
The government's aim is that the long term funding of the OGA will come from the industry.
The new body is the official response to a review into the North Sea's future by Sir Ian Wood earlier this year - UKCS: Maximising Economic Recovery Review.
Image: The launch fo the Wood Review in Aberdeen.
The review was set up by Secretary of State Ed Davey in June 2013, and detailed how the British economy could receive a potential £200 billion boost over the next 20 years through the recovery of an additional 3-4 billion barrels of North Sea oil and gas, reducing imports and increasing UK energy security.
Other recommendations from the review formally accepted by the government included:
Today's announcement also confirmed the new body would be a Government Company, giving it independence to deliver. A search for a chief executive for the OGA is underway.
Responding to today's announcement, Sir Ian said: "In all the circumstances, Industry should be pleased with the progress, and the Interim Advisory Panel, which I chair, will continue to work closely with the Department of Energy and Climate Change (DECC) to maintain this. The GovCo will take some time to set up but in the meantime DECC are going ahead with an Executive Agency which will enable the new Regulator to begin to have an impact soon after the new Chief Executive joins. In the meantime, the present DECC management and team are, where possible, beginning to work to the principles of the new recommendations and this should enable the new chief executive and team to make faster progress when they start."