LONDON, Feb. 25 (UPI) -- The British energy sector needs to be more competitive and efficient to tap into remaining reserves in the North Sea, a government energy regulator said.
Andy Samuel, chief executive officer at North Sea regulator Oil and Gas Authority, spelled out industry guidelines to revitalize the region's offshore energy sector. His report said that, while the country remains a "substantial" oil and gas producer, companies are scaling back their investments in both infrastructure and exploration.
"Significant hydrocarbon resources and economic value are yet to be delivered from the U.K. North Sea but to unlock this potential we must create a more competitive and efficient operating environment, where costs are effectively managed and companies have the confidence to invest today and tomorrow," he said in a Tuesday statement.
Risks are present in the region in terms of profitability and an overall loss of sector confidence. To arrest the decline, Samuel, a former executive at British energy company BG Group, said his agency would work "urgently" to protect and ensure investment plans and improve operational efficiency.
A survey from industry body Oil & Gas U.K. this week found oil and gas production slipped 1 percent year-on-year but should increase slightly to 1.43 million barrels of oil equivalent per day, provided there are no major disruptions.
Operating expenses in the North Sea, however, are up 8 percent while revenues for oil companies working in the region are at their lowest levels since 1998.
The British government last year said it was moving forward with recommendations from retired businessman Ian Wood, who found there may be an additional 4 billion barrels of oil equivalent available for recovery in the North Sea.
"[The] industry, government and the OGA must build on the positive tripartite relationship, which has developed since the publication of the Wood Review, to demonstrate collective leadership and deliver solutions," Samuel said. "The future of our oil and gas industry depends on it."
