North Sea oil industry "on the brink of collapse" - oil boss

Oil companies are cutting staff and investment in a bid to save money, after it was revealed that virtually no new projects are profitable with oil priced below $60 a barrel.

Robin Allan, chairman of the independent explorers’ association Brindex, said: "It's almost impossible to make money at these oil prices. It's a huge crisis. This has happened before, and the industry adapts, but the adaptation is one of slashing people, slashing projects and reducing costs wherever possible, and that's painful for our staff, painful for companies and painful for the country.”

Allan is also a director of Premier Oil. He revealed that many of the UK job cuts within the industry would not have been publicly announced because oil workers are commonly employed as contractors, which are easier for employers to cut.

He added: "It's close to collapse. In terms of new investments - there will be none, everyone is retreating, people are being laid off at most companies this week and in the coming weeks. Budgets for 2015 are being cut by everyone."

UK oil and gas production has declined since 1999, although the rate of decline slowed in 2013, a year which saw the highest level of investment on record.

The industry was hoping to see continued high levels of investment, offsetting the inevitable decline of production as the North Sea's resources are used up. However, falling oil prices have jeopardised a potential recovery.