WIDE-ranging changes are needed in all sectors of the offshore oil and

gas industry to secure the future of North Sea developments, according

to a working party report on the competitiveness of the UK Continental

Shelf.

The essence of the conclusions of the report, published yesterday by

the Department of Trade and Industry, is that a profound change of

culture is necessary for all parties involved in the offshore industry

if costs are to be controlled.

The report says this will call for a change of approach from oil

companies, contractors, suppliers, and the Government.

The working group was set up after a conference in Aberdeen in October

to consider the implications for the offshore industry if costs were not

reduced.

Since then representatives from the oil industry, the offshore

supplies industry, the Scottish Trades Union Congress, and the DTI have

been meeting under the chairmanship of Mr John d'Ancona, director

general of the Offshore Supplies Office.

The group, which invited evidence from 33 companies and organisations

related to the offshore industry, says the practices of the past evolved

in times of large projects and generally rising oil prices and at a time

when much had to be learned about the complexities of managing major

projects in a harsh offshore environment.

''The challenge for both the Government and the industry now is to

adapt the available skills and expertise to suit changed market

conditions,'' says the report. ''Change on the scale that is needed will

require the development of a high degree of trust and confidence between

all parties and their perceptions of each other's roles must also

change.