“Close to collapse” is how one industry leader described the UK's oil industry.
Oil companies and service providers are cutting staff and investment to save money. With oil prices currently below $60 a barrel, and with no price rise in sight, it seems that projects in the North Sea are struggling to make a profit.
Robin Allan, chairman of the independent explorers' association Brindex, and director of Premier Oil has said that "It's almost impossible to make money at these oil prices".
Reports yesterday suggested that UK employment is at the highest it has been in six years, however there seems to be another story playing out in the North Sea. Mr Allan stated that many of the job cuts across the industry would not have been publicly announced. The reason for this being that Oil workers are often employed as contractors, and they are easier for employers to cut.
His remarks follow in the wake of those made by the veteran oil man and government adviser Sir Ian Wood, who last week predicted a wave of job losses in the North Sea over the next 18 months.
Budgets are now being cut in preparation for what looks like a touch year ahead for the industry.