The UK’s ageing North Sea rigs are facing “unprecedented challenges”, the secretary of state for energy and climate change said on Monday as he announced a review into how to maximise oil production.

Ed Davey said: “Although we have produced a lot of barrels in the North Sea, there is an awful lot there still to be produced as well.” He cited falling exploration and production rates, ageing infrastructure, declining efficiency and the risk of premature decommissioning, adding: “All these challenges need to be addressed if we are going to get the maximum economic benefit from the UK.”

Davey has appointed Sir Ian Wood, the veteran Aberdeen oilman, to lead a review that will report in early 2014. After 45 years in the industry, Wood stepped down last year from Wood Group, the oil and gas services company founded by his grandfather in the early 20th century.

The review will examine how to extend the life of infrastructure, improve efficiency and promote the use of enhanced techniques to extract hard-to-reach oil. However, it will not make recommendations on tax.

In the March budget the government won plaudits from the oil industry when it announced tax breaks, a move seen as a rapprochement after a £2bn tax hike in 2011. Davey said there was “a recognition of the need for fiscal stability”.

Malcolm Webb, chief executive of Oil and Gas UK, said there would be no return to the “glory days of 2000” when the North Sea generated 4m barrels of oil equivalent (BoE) a day, but production could rise from the current 1.5m to 2m BoE by 2017. “Too many people have decided because we are now mature … that we are somehow over the hill and nothing could be further from the truth, ” he said.

Simon Bullock, a campaigner at Friends of the Earth, said: “Yet again the government’s fossil-fuel addiction is keeping the nation hooked on dirty and increasingly costly oil and gas while jeopardising crucial climate targets.”

http://www.guardian.co.uk/business/2013/jun/10/uk-oil-review-north-sea