If timely and effective measures are not adopted, UK may soon face energy crisis as investment in North Sea oil and gas sector is drying up.

The enormous potential of vast reserves of the North Sea may remain untapped for ever with UK's oil and gas sector slipping into the grip of an energy crisis, reported Scotsman.

Capital investment in Britain's oil and gas industry is on the way to drop drastically by almost 50%, with the economic turmoil and low oil price taking toll of this offshore sector. As much as 50,000 jobs are facing threat on account of this, leaving billions of barrels of oil unrecovered. A recent yearly economic report of Oil and Gas UK's says that investment in this concerned industry declined to £4.8 Billion (€5.55 Billion) in 2008, a drop of £1.2 Billion (€1.4 Billion) since 2006.

After the release of figures revealing declining investment and increasing costs in the industry, Chief Executive of industry body Oil and Gas UK, Malcolm Webb, stated that if timely measures are not taken to help the oil and gas industry, the country could witness an energy crisis, reported Ireland online on July 8, 2009.

The leaders of Oil and Gas UK, the pan-industry trade body, cautioned that there is a higher risk of acceleration in the decommissioning of existing oil and gas fields in wake of the refusal of government to reduce the burden of tax on the industry.

According to the Oil and Gas UK, the recent figures emphasized the call of the House of Commons Energy and Climate Change Committee for increased investment incentives. The increased investment could be realized only if the costs decline, tax burden is reduced and the banking sector's problems are resolved, said Mr. Webb.

According to a Research Analyst at RNCOS, "Current developments in the UK are not serious enough about the traditional oil and gas industry. Both the industry and the government need to do work out on the ways to escape the expected energy crisis. Although latest shifts in tax regime were a good effort in this direction, a lot more need to be done to enhance the production activity and to explore new potential reserves."

Related Market Research Reports:
Fuel Cell Industry Analysis
Global Biofuel Market Analysis
Indian Solar Energy Market Outlook 2012