The funding will be invested over the next five years for the establishment of new arm’s length regulatory body in response to Sir Ian Wood review.
While in the long term the new Oil and Gas Authority (OGA) will be 100 percent funded by industry, the Government contribution of £3m funding for 5 years from 2016/17 is to demonstrate commitment to the OGA and ensure it is established as quickly as possible.
The Oil and Gas Authority (OGA), which will be based in Aberdeen, will receive £3m a year for five years from 2016-17.
The OGA will however be fully funded by the industry in the long-term.
UK Secretary of State Ed Davey said the Wood Review is good for energy security, economy and for jobs.
"We’ve made a lot of progress in a short amount of time; in six months we have announced the new body will be located in Aberdeen, we’re recruiting for a world-class CEO and we already have the legislative framework for the new body underway," Davey added.
"This pace shows how determined we are to maximise the future potential of the UK’s offshore oil and gas industries, which currently employ 450,000 people in the UK."
"As our Carbon Plan shows, the UK will need oil and gas in the decades ahead as we decarbonise, so it makes economic and energy security sense to produce that domestically."
