LONDON Feb 18 (Reuters) - British ministers will next week back plans for a new regulator to ensure North Sea oil and gas firms squeeze the maximum economic benefit from Britain's finite natural resources, a government source said on Tuesday.
The North Sea is thought to contain billions of barrels of hard-to-extract oil but with many platforms and pipelines coming to the end of their working lives, time is running out to get at them.
The government source, who spoke on the condition of anonymity, said plans for a more powerful regulator will be formally endorsed by energy minister Ed Davey on Feb. 24, coinciding with a top-level government meeting in Aberdeen, Scotland.
They will make the decision on the basis of a recommendation - to be issued in a government-commissioned report on the same day. The report has been drawn up by Ian Wood, former chairman of oil services company Wood Group,, on maximising recovery of oil and gas from Britain's North Sea.
A spokeswoman from the Department of Energy and Climate Change said: "The government will be formally responding to the recommendations of Sir Ian Wood's review by the end of February."
The review will set out plans for a beefed-up regulator to drive cooperation among firms working in existing fields, encourage exploration of new sites and implement an all-encompassing long-term strategy for oil and gas extraction.
The final proposals are expected to echo an interim report released in November, which estimated that its recommendations could unlock 3 to 4 billion barrels of oil, worth around 200 billion pounds ($333.96 billion).
Next week's announcement will be trumpeted as a shot in the arm for the British economy which, although recovering, is still heavily indebted after a prolonged recession and banking crash. In 2012/13 the government still relied on the oil industry for over 15 percent of all corporate taxes.
The industry is currently regulated by the government but the interim report said this setup was ineffective, proposing an "arm's length" regulator with expanded powers and resources.
Part of the regulator's task will be to find a way to resolve disputes between firms who say their ability to extract is hampered by major oil companies who are focused elsewhere in the world and see little benefit from helping competitors.