Wood Review: Sir Ian Wood calls for new industry regulator

New regulator aims to ensure companies are exploiting resources to their full

Sir Ian Wood's reports makes recommendations that could boost productivity by up to £200 billion (GETTY IMAGES)

One of the founding fathers of the North Sea oil industry has called for the creation of a tough new regulator to ensure companies extract as much oil and gas as possible from the fields - and said it should be paid for by the companies themselves.

The long-awaited Wood Review said the new regulator should only approve new investments if companies prove they are exploiting resources to their full.

“I believe the industry will have to pay, but in return should be guaranteed appropriate service level agreements,” said Sir Ian Wood, author of the report and former chairman of the oil services company Wood Group.

“The proposals and limited new powers are much more about stronger and better stewardship, establishing standards and procedures for collaboration and dispute resolution, as opposed to more regulation,” Sir Ian said.

“I am clear that the development of the UKCS (UK continental shelf) must continue to be led by operators, who provide the significant investment of funds, expertise and experience,” he added.

Energy secretary Ed Davey said he “fully backed” Sir Ian’s recommendations and would start implementing them immediately.

“Britain will still need large amounts of oil and gas, even as we cut our carbon emissions over the coming decades. …This will be good for energy security, good for the economy and good for jobs.”

 Sir Ian’s recommendations also include a new shared strategy for “maximising economic recovery of oil and gas for the UK”, with commitment from the government and the oil and gas industry and greater collaboration by industry in areas such as development of regional hubs, sharing of infrastructure and reducing the complexity and delays in current legal and commercial processes.

The British economy could receive a potential £200bn boost over the next 20 years, through the recovery of an additional 3 to 4bn barrels of North Sea oil and gas, according to the report.