Davey to back energy industry calls for tougher regulation of North Sea An oil platform in the North Sea Plans to boost North Sea oil and gas production, which experts say could generate at least £200bn for the UK economy, are set to be adopted by the energy secretary. Ed Davey is expected to back demands from the industry for a much tougher regulatory regime in the North Sea, requiring companies to collaborate to maximise the recovery of oil and gas from existing fields and new discoveries. The minister will this week receive the final report from oilman Sir Ian Wood on how to get the most out of the North Sea, whose remaining potential has often been overlooked by politicians fixated on the prospects for shale gas. "In the next five to 10 years, I think the impact of the Wood review will be much bigger than shale gas," Mr Davey said. The minister said Britain had a "once in a generation" chance to get the regulatory and fiscal regime right for the North Sea. Although investment in the North Sea reached a record high of £14bn last year, Sir Ian says this masked underlying problems of declining exploration and falling production: output fell 38 per cent in the past three years. As remaining reserves become harder to access, Sir Ian will urge ministers to abandon their "light touch" regulatory regime and set up a new body with powers to force companies to share vital infrastructure. Mr Davey has indicated that he is ready to legislate for a beefed-up North Sea regulator, which would be funded by the industry, if the sector wanted it. "We need to respond and respond constructively," he said. Malcolm Webb, chief executive of industry group Oil & Gas UK, said Sir Ian's call for a stronger regulator would be widely welcomed. "The industry is up for the prescription of a better resourced, proactive regulator," he said. Mr Davey admits the Treasury was originally sceptical about new regulation but he told the Financial Times: "The industry seems to want the government to play a bigger role in the North Sea in partnership with them." Since large-scale oil production in the North Sea started in the 1970s more than 41bn barrels of oil equivalent (boe) have been extracted from the UK continental shelf: it is estimated that a remaining 12bn-24bn boe could be produced. But Sir Ian says many developments will only be viable through the shared use of infrastructure and the creation of "hubs and clusters" bringing different companies together and jointly using transport and processing infrastructure. The former head of oil services supplier Wood Group said he believed the regulator would work with the sector in the wider interest and would not need to resort to sanctions. "I don't see a heavy policeman," he said. He is also looking to George Osborne for fiscal help, although he says recently announced tax reliefs have been "well received" by the industry; relations were badly soured by the chancellor's tax grab on the sector in his 2011 Budget. Sir Ian believes that if his plans are adopted it would help deliver at least 3-4bn boe more than would otherwise be recovered, worth £200bn: at the high end this would put Britain in a better position to reach the North Sea's 24bn boe potential.