North Sea Oil Shake-Up Could Give £200bn Boost
A shake-up of North Sea oil regulation could provide a £200bn boost to the UK economy.
Up to an extra four billion barrels of oil could be recovered under changes put forward by Sir Ian Wood, a retired oil tycoon.
His review is being published on the day David Cameron and Alex Salmond hold Cabinet meetings just 10 miles apart in northeast Scotland, less than seven months before the date of the referendum on Scottish independence.
The measures contained in Sir Ian's report, which the Government will fast-track for implementation, include the creation of a new independent regulator to supervise licensing.
Energy companies will also be urged to work more closely together to explore and develop oil fields, which are thought to hold supplies worth at least £1trn.
Downing Street said the UK is "well placed" to absorb price shocks, which it warned would "dramatically affect a small country's budget".
However, Mr Salmond, the Scottish First Minister, said: "Independence presents an unrivalled opportunity to boost our energy wealth, support employment and grow our economy."
"With independence we would have new powers in areas such as energy regulation and the ability to target and apply financial incentives," he added.
"With a new Scottish-based energy department and control over key economic levers, the potential to boost the energy industry and bring benefits to consumers and the wider economy would be enormous."
Mr Cameron described the North Sea oil and gas industry as an "economic success the whole country can be proud of".
He said: "I promise we will continue to use the UK's broad shoulders to invest in this vital industry so we can attract businesses, create jobs, develop new skills in our young people and ensure we can compete in the global race."
Sir Ian's review was ordered last June to explore how the UK can "make the most of the huge opportunity" the offshore oil and gas industry represents.
An interim report published in November called for a new "arm's length" regulator with additional powers and responsibilities, and said companies should share resources and work together on new developments.
:: Watch Sky News live on television, on Sky channel 501, Virgin Media channel 602, Freeview channel 82 and Freesat channel 202.