OREANDA-NEWS. More than half of UK oil and gas companies have cut jobs in response to lower oil prices in the last 12 months and 48pc expect to reduce operating costs and take efficiency measures this year, according to a survey carried out by the UK's Bank of Scotland.

The bank surveyed 141 companies right across the supply chain, ranging from producers to providers of equipment and services — 41pc of those said they have been severely or badly affected by the drop in oil prices. "Among the 41pc of all companies severely or badly affected by the price fall, only 40pc think they have done all they can, or at least enough to survive the downturn, while 43pc think there is more to do," Bank of Scotland said.

Oil service companies have borne the brunt of a sharp downturn in exploration activity and field development work, with 80pc of firms that provide sub-sea services and 75pc of drilling contractors saying they have been badly or severely affected. Only 19pc of UK exploration and production companies say they have been badly affected by the fall in oil prices, with many producers managing to shelter their cash flows through hedging programmes.

Most firms surveyed are more pessimistic about an oil price recovery than they were a year ago.

"Asked when they expected Brent crude to recover to $75-80/bl, only one company thought it could happen this year, a third of respondents expected 2018, but nearly four out of 10 thought it would come in 2020 or later, with large companies especially conservative — six out of 10 reckoned on 2020 or later," Bank of Scotland said.