NORTH Sea oil and gas firms are at rock bottom and fear further job losses, a report has warned.

New research says companies’ confidence is at an all-time low, with businesses bracing themselves for a tough 2016.

The offshore sector has faced difficulties all year after the price of oil fell to less than $50 a barrel, with operators forced to shed thousands of jobs.

But, despite the worries, North-East offshore support organisation NOF Energy last night told The Northern Echo there is hope, with many firms remaining resolute by shifting into different sectors to maintain order books.

According to a report by Aberdeen and Grampian Chamber of Commerce (AGCC), alongside the Fraser of Allander research institute and law firm Bond Dickinson, three quarters of businesses are less confident about their future, with 85 per cent anticipating more job cuts.

It also revealed the lowest number of companies are working at optimum levels in the UK Continental Shelf, in the North Sea, since 2004, with 80 per cent seeing a rise in projects being cancelled.

James Bream, AGCC research and policy director, said: “The low confidence levels come as no surprise and the outlook suggests there will be more pain ahead for the sector.

“However, if we are not complacent, a long-term future still exists for the sector and players, such as the Oil and Gas Authority, will have a major role alongside the industry itself.

“The fact is the UK Continental Shelf is a frontier basin and always has been.

“This provides a unique set of opportunities, which can continue to allow our supply chain to be active around the globe, but this success is not guaranteed.”

Mr Bream reiterated the point made by NOF, saying businesses are considering alternative areas, with 78 per cent looking to be more involved in decommissioning work and about half eyeing a shift into renewable energy projects.

George Rafferty, chief executive of NOF Energy, which has a base near Durham City, said firms are doing their best in a trying environment.

He added: “The UK oil and gas sector is experiencing a serious period of transition, which is being addressed by a greater level of collaboration between the industry, the supply chain and bodies, including the Oil and Gas Authority.

“This will help ensure a more sustainable future for the North Sea, which still holds considerable opportunities for decades to come.

“However, in this current challenging climate, the UK supply chain has to maximise on its achievements in the North Sea in new geographic markets and alternative sectors.

“We are supporting members with ambitions to apply their skills, technologies and services into markets across different continents that are keen to utilise UK expertise.

“As the report indicates, those operating in the oil and gas sector are also looking to diversify into alternative sectors.

“This is a trend that is already being set by our members, who have successfully secured work in sectors, including offshore wind and decommissioning.”