The UK's oil and gas sector is reinventing itself to attract much needed investment, a new report suggests.
As the industry continues to grapple with the challenges of a major downturn caused by the oil price slump, a report by Oil & Gas UK found the tide is starting to turn.
The trade body's annual review of industry performance found the UK's North Sea region may soon start to benefit from a badly needed investment boost with almost $6bn (£4.6bn) worth of mergers and acquisitions taking place in the sector in the first half of the year.
This year's economic report found companies were becoming more efficient and competitive, the cost of lifting oil out of the North Sea almost halved from 2014 and production increased by 16 per cent since 2014.
“Our sector is successfully re-positioning through efficiency and cost improvements. We are transforming in a way that is getting UK oil and gas back in the game," said Deirdre Michie, chief executive at Oil & Gas UK.
Scott McClurg, head of energy at HSBC Corporate Banking, added: “The time has come for revolution, not evolution, in the UK oil and gas sector.
"The convergence of technological advancement and cost pressures associated with the oil price slump has led to bold thinking and opened up fresh investment opportunities. Ambitious change also makes UK firms stand apart in a global transitional race."
However, Michie added the industry still needs further investment to generate new activity and sustain the 300,000 UK jobs it supports.
She called on the government to develop a clear energy policy that reinforces the role for oil and gas in the industrial strategy, support a sector deal and confirm in the Autumn Budget that the decommissioning tax relief will be modified to support further investment activity.
If interest in the basin translates to tangible activity, it could help unlock around £40bn worth of potential development opportunities.
“It’s vital that industry and government work together to secure our future. There are billions of barrels of oil and gas still to go after in our own back yard. Government and industry must make the most of the opportunity offered by our sector," Michie said.
McClurg added that data will play a big part in the success of the UK's oil and gas sector.
"The North Sea is still rich with opportunity, but no longer simply because of the barrels of oil – data, not drilling, is part of the sector’s future," McClurg said.