Bank of England governor Mark Carney has warned that the crisis engulfing the North Sea oil and gas industry is likely to “persist for some time”.
An estimated 120,000 jobs will have been lost by the end of this year due to the oil price slide which began in mid-2014. Carney added that the turmoil was having a "multiplier effect" on the wider Scottish economy.
Speaking to The Herald Scotland, he said: "I would say that the reaction of the North Sea oil and gas sector has been impressive. It has been impressive in terms of reductions in costs..."
"Amid dark clouds, there have been some rays of sunlight."
But he added that the oil price rout was "difficult, I don't want to underplay it."
"It is a challenging environment and, given global prices, that may persist for some time."
Carney's warning comes days after industry body Oil & Gas UK called on the government to "vigorously champion" investment in the UK Continental Shelf.
"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," Deirdre Michie, Oil & Gas UK’s chief executive, said.
"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."