The number of internal reviews by banks into the health of oil and gas-reliant businesses that they have funded are understood to have tripled recently. FRP said enquiries from struggling businesses dependent on the sector had “gone through the roof” as a result. The industry is at the mercy of record global low oil prices and the absence of anything substantive from the Treasury to assist is a sharp reminder the industry is having to rapidly adjust to a seismic shift. Tom MacLennan, partner FRP Advisory “Feeling the squeeze from the contraction are small-scale service industries as the number of oil workers and their discretionary spend are slashed,” he added, predicting that staffing and fabrication businesses will also be in the vanguard of the failures. It is thought some of the first to fail will be hotels and guesthouses that house oil rig workers, along with the ferry and helicopter services that transport staff and equipment offshore. Demand for oil means that th sector in Britain has dodged recession for almost 30 years and the current generation of executives have little experience of dealing with such tough times. Mr MacLennan added: “The shake-out in costs has only just begun and management across the oil and gas and services sectors are now making some tough decisions.” Even if the Autumn Statement had offered new tax incentives, Mr MacLennan said they “would have little effect. No amount of efforts from the Treasury can stimulate capital expenditure by the oil majors” in the face of oil trading at below $50 a barrel. The prediction was underlined by research from Aberdeen & Grampian Chamber of Commerce released to coincide with the Autumn Statement. The study showed activity in the sector was at a more than 10-year low and four out of five contractors said they were less confident about the future than they were a year ago. Industry body Oil & Gas UK has called for more support for the sector, saying a tax cut could be needed if oil prices continue to remain at their current levels. Mike Tholen, the body’s economics director, added: “There is still much to play for in the UK’s North Sea – in terms of both barrels of oil and gas for the country, highly skilled jobs and the security that comes with an indigenous energy supply.”
According to advisory firm FRP , which restructures failing businesses , a " wave of company failures " is inevitable in the UK 's oil and gas industry , with companies supporting the wider energy sector to fail first . FRP estimates that Aberdeen and north - east Scotland will be the focus of company failures , with downstream companies set to suffer the initial failures . A reduction of industry workers will have an impact on small - scale service providers , affecting hotels and guesthouses , as well as ferry and train services transporting staff and equipment .