The legislation, which is an early government priority to encourage growth in the economy, is designed to ensure that the industry can survive for several decades, despite the steep decline in the oil price and the added cost of decommissioning old oil fields.
The bill, which has already won cross-party support, will strengthen the Oil and Gas Authority (OGA), set up after the Wood Review of the industry.
The OGA will get new regulatory powers so that it can drive greater collaboration and productivity in the industry, helping it to grow, attract investment, create jobs and remain competitive.
These powers will enable the OGA to maximise the economic recovery of oil and gas reserves from UK waters.
The moves will go beyond recommendations made by the oil and gas review carried out last year by the by billionaire Sir Ian Wood and form a strategy to encourage investment to recover all the remaining oil and gas reserves in the North Sea.
A Department of Energy and Climate Change spokesman said: “By reinvigorating our domestic oil and gas industry, we will also reduce our reliance on volatile foreign imports.”
The move comes after George Osborne used to his Budget speech to confirm tax breaks for the oil and gas sector.
Concerns have been raised in recent weeks by the independent Office for Budget Responsibility (OBR) that the days of high tax revenue for government coffers from the North Sea has passed.
The OBR cut its forecast for tax revenue from £37 billion to just £2bn over the next 20 years.
This followed a collapse in the price of oil from $120 a barrel to just over $50.
The slide in the price has led the UK and Scottish Governments to look for a rescue package for an industry which supports 375,000 UK jobs and contributed £3 billion to the Treasury in the last year.
Welcoming the report, SNP Westminster energy spokesman Callum McCaig: “We are very much in support of the establishment of the OGA and it having the tools required to implement the recommendations in the Wood Review.
“That aspect of the bill is a key component to making that happen.
“With all legislation the devil is in the detail, but the principles behind it are certainly something we are in favour of.”
Oil & Gas UK’s chief executive, Deirdre Michie, said: “While it will take time to digest and comment on the full detail of the energy bill, we welcome its publication as it formally establishes the Oil and Gas Authority as an independent, government company. The OGA is a critical catalyst for the work being done to sustain offshore oil and gas activity and the bill aims to provide the new regulator with the tools and capabilities to do the job effectively and efficiently, so we support its swift passage through Parliament.
“The provisions in the bill complete the implementation of Sir Ian Wood’s recommendations for MER UK – maximising economic recovery – from the UK continental shelf.”
The energy bill will also controversially bring an end to subsidies for onshore renewables, mostly wind farms, which has met with protest from the Scottish Government.
Mr McCaig said: “Ending onshore wind subsidies has the potential to have a detrimental impact on investment in the renewables sector in Scotland and the ability to meet climate change targets.”