Industry body Oil & Gas UK has called on the government to "vigorously champion" investment in the UK Continental Shelf, as exploration activity falls to an all-time low.
The group's 2016 economic report released today found that exploration activity has fallen to record lows and little new investment has been approved this year or in 2017.
The supply chain has seen an average 30 per cent fall in revenues since 2014 and some 120,000 are expected to have been lost over the past two years, Oil & Gas UK added.
But it also showed that extraction costs from the UKCS has nearly halved to $16 per barrel of oil equivalent since 2014, while production rose for the first time in 15 years last year.
Deirdre Michie, Oil & Gas UK’s chief executive, said: "The UKCS is in urgent need of fresh investment to boost exploration and drive activity, particularly for the supply chain."
"In light of this I am calling on governments today to vigorously champion the UK’s oil and gas industry, by providing certainty in our fiscal regime, encouraging new entrants to the market and recognising our supply chain as vitally important to the economy."
"The evidence in the report demonstrates what our industry can achieve when the basin’s competitiveness is addressed and the tax regime reformed. Now it is time for the UK and Scottish Governments to reinforce their efforts to promote the UKCS, nationally and internationally, as an attractive investment with world leading capability from front end exploration to late life operations."