A recent survey of 70 active companies by industry body Oil & Gas UK shows that a large number of companies cannot afford to increase oil and gas exploration in the North Sea, in spite of an increase in known reserves.

The report explains that the industry is still suffering from traces of the economic crisis, and the fact that reserves to extract have already been exploited will lead to a fewer projects being developed.

The survey also expects a fall in the UK’s domestic oil production and increase the need for imports, though there are 11 billion barrels of oil and gas in existing projects and enough to meet half the UK’s demand in 2020.

It recommended that companies will need to raise £60bn of capital expenditure to extract North Sea’s oil.

"The increase in the number of new UK oil and gas developments under consideration is, on the one hand, encouraging. It confirms our belief that the province, whilst mature, has decades still to flourish. This is a high technology industry and companies have developed and continue to deploy the best and most advanced technology to unlock the UK’s oil and gas resources,” said the industry group’s economics director and author of the report, Mike Tholen.

He adds that confidence had improved, but the investment climate was still not good.

"However, even that is not proving enough, illustrated by the production decline and falling investment seen over recent years. Things are made no easier by the fall in wholesale gas prices."

Even so, Oil & Gas UK believes investment could pick up next year, potentially rising above £5bn from £4.7bn. The total number of wells drilled has dropped by almost a quarter to 130, while the number of exploration and appraisal drilling projects fell by 40pc to 65 wells.