OGUK’s ‘Business Outlook: Markets and Investment’ report expects drilling levels to fall back to the lows experienced in 2016, down more than a third on previous forecasts. The report also warns of a possible 20-30% decrease in capital investment for 2020, as well as the potential that the operators in the sector will experience negative cash flow this year.

While the industry was only beginning to emerge from one of the most prolonged and severe downturns in its’ history, OGUK says the supply chain had remained under significant pressure, with tight margins and relatively low activity levels.

The organisation has called for government support to ensure the sector can continue to provide security of supply in the face of these extraordinary difficulties. The body also said it was working with industry, regulators and government to understand how it can protect supply chain companies, and jobs. Innovative thinking, partnerships and meaningful collaboration will be required in weathering the storm, it added.