Publication of the Impact Assessment related to implementation of the Wood Review proposals for UK offshore oil and gas regulation
In June 2013 I commissioned Sir Ian Wood to undertake a comprehensive review of the regulation and stewardship of the UK’s hydrocarbon reserves. Sir Ian published his report on the 24th February which made clear that the size of the prize on offer is considerable. The review estimated that full and rapid implementation could deliver 3 to 4 billion barrels of oil equivalent more than would otherwise be recovered over the next 20 years. Today, the Government is publishing the Impact Assessment (IA) which accompanies the Phase 1 proposals to implement the Wood Review recommendations – the powers to charge a levy and the establishment of the MER UK principles in statute, currently contained in the Infrastructure Bill. Without further secondary legislation these will not have a direct impact on business. The IA does however provide an estimate of the potential net benefit to business associated with the implementation of all the Reviews recommendations of between £20.7 billion and £56.3 billion (net present value), primarily as a result of greater oil extraction from the North Sea. This reconfirms the importance of ensuring the Wood Review recommendations are fully implemented as quickly as possible. I will be depositing a copy of the Impact Assessment in the Libraries of the House.