An interim report by Sir Ian Wood concluded that the DECC regulator is “no longer adequate to meet the challenges of managing an increasingly complex basin”.
Sir Ian will shortly publish his full Maximising Economic Recovery in the North Sea report.
Scottish Energy Minister Fergus Ewing said: “I call on the UK Government to back Sir Ian’s plans by announcing the creation of a new fit for purpose North Sea regulator based in Aberdeen, without delay.
“Sir Ian’s interim report estimated that the prize from increased and effective co-operation could be an additional three to four billion barrels of oil equivalent over 20 years, which could be worth £200 billion.
“Time is of the essence. In line with industry, we believe that it is essential these recommendations are implemented with speed, and that a shadow body be set up now, rather than await the outcome of primary legislation.
“I share Sir Ian’s view that the industry should finance this body, and since most of the developments in the North Sea and west of Shetland are managed from Aberdeen, that is the only conceivable principal location for the new regulatory body.
“By addressing the challenges facing the oil and gas industry and harnessing the opportunities, enormous benefits can be reaped by the industry and by Scotland.
“The publication of Sir Ian’s final report is expected next week, along with the UK Government’s response, and I look forward to considering these in full.”
The interim report said the existing regulator is “significantly under-resourced and under-powered”.
The Scottish Government appointed an Independent Expert Commission on Oil and Gas in September 2013, chaired by Melfort Campbell, who will report in the spring.
In addition to the regulatory regime, the Commission will make specific proposals in relation to the North Sea fiscal regime with a view to providing long term stability and predictability for the industry. It will also consider Sir Ian’s recommendations in full.