The UK's offshore oil and gas sector has endured a 'bleak' past year, according to industry body Oil & Gas UK.
Figures from the organisation's latest report showed that the past 12 months was the worst annual performance in the industry for over 40 years. The sector has been hit hard by falling oil prices and rising costs prompting it to spend £5.3 billion more than it earned from sales during 2014.
Over the course of 2014, offshore oil and gas companies have spent a combined £14.8 billion on investment, way above the predicted levels. Analysts believe that this will fall to between £9.5 billion and £11.3 billion during the coming year. Companies are now becoming more reluctant to spend during 2015 as the oil and gas market remains volatile.
Oil & Gas UK chief executive Malcolm Webb explained: "Even at $110 (£71) per barrel, the ability of the industry to realise the full potential of the UK's oil and gas resource was hamstrung by escalating costs, an unsustainably heavy tax burden and inappropriate regulation.
"At current oil prices, we now see the consequences only too clearly."
It has been a turbulent year for oil and gas across the world. Both Brent and US crude prices have been tumbling at an alarming rate and while it provides a boost for motorists as fuel is cheaper, it is playing havoc for the offshore sector. Members of the Organization of Petroleum Exporting Countries (Opec) have met on numerous occasions to discuss the issue but there is a continued reluctance to reduce output to stimulate prices.
Russia has been one of the major casualties of the falling oil prices. Combined with economic sanctions imposed by the European Union and the US, for Russia's role in the unrest in Ukraine, the country has been teetering on the brink of recession.
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