Britain said it would create a new oil and gas regulator which will help UK explorers speed up their search for hard-to-access fossil fuel resources in a bid to counter plunging North Sea production rates.

A government-commissioned report published yesterday said Britain could lose out on a potential £200 billion ($335 billion) worth of oil and gas output if measures proposed in the report are not followed.

The country's oil and gas output has fallen around two thirds since its peak at the turn of the century, but up to 24 billion barrels of oil equivalent (boe) are expected to still come out of the ground.

Oil and gas companies active in the UK's Continental Shelf (UKCS) are expected to meet most of the costs of a new oil and gas regulator that will speed up licensing processes, help co-ordinate exploration data and enforce rules to maximise well output.

Running a new regulator is estimated to cost £20-30 million a year, a small amount compared to revenues oil and gas explorers make from selling fossil fuel.

The government's decision to create a dedicated regulator follows a recommendation in the oil and gas sector's first review since the mid-1990s, also known as the Wood Review.

The North Sea is thought to contain billions of barrels of hard-to-reach oil but with many platforms and pipelines coming to the end of their working lives, time is fast running out to get at them.

The review's task was outlining how to make that easier.

Big players in the oil and gas industry, such as BP, Statoil or Shell, welcomed the creation of a new regulator.

Industry and government are still discussing the exact split up of the costs to run the body, with a decision expected by the summer.

Industry experts say the cost to companies is dwarfed by the benefits a smooth-running regulator would offer. Meanwhile, government revenues from North Sea production fell more than 40 per cent to £4.7 billion in 2012-13, underlining the sector's importance to Britain's economic recovery.-Reuters