Oil industry close to collapse

Robin Allan, chairman of the independent explorers’ association Brindex, said it is “almost impossible to make money” with the oil price below $60 (£38) a barrel and there will be no new investments.

But business advisors PricewaterhouseCoopers (PwC) said the falling oil price “should be a net benefit to our economy as a whole, even if there is some losers in the UK oil and gas sector and in particular places like Aberdeen”.

While the oil price has plummeted, gas prices remain “relatively favourable” and provide “great opportunities” for investment, North Sea-focused company Independent Oil and Gas Plc said as it announced it is increasing its gas resources off the east coast of England.

Mr Allan, who is also a director at Premier Oil, said it was virtually impossible to make money at current prices.

“It’s a huge crisis,” he said.

“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.”