The steep fall in oil prices is having a huge negative effect on the industry in Britain according to the head of the independent explorers’ association Brindex who said it is “close to collapse”.
Interviewed by the BBC, Robin Allan warned there will be no new investments in the North Sea oil fields as it’s “almost impossible to make money” with prices below $60 dollars a barrel.
An energy adviser to the British government, Sir Ian Wood, recently predicted many job losses in the North Sea next year and in 2016.
Several companies have already announced cuts in spending and layoffs because of oil’s six-month price rout.
Oil this week slumped as low as $58.50 and has almost halved since June as fast-growing US shale output overwhelms demand.
Losses accelerated after producer group OPEC decided not to cut output at its meeting last month.