The number of jobs lost due to the downturn in the oil and gas industry in the UK could reach 120,000 by the end of 2016.

Jobs fell by an estimated 84,000 to around 370,000 last year and are forecast to reduce by a further 40,000 by the end of this year, new figures released by trade body Oil & Gas UK reveal.

Brent crude oil is currently trading at around $50 (£34.6) a barrel, less than half the price it was in 2014 when jobs linked to the sector peaked at more than 450,000, it adds.

The latest analysis by marketing services firm Experian suggests 330,000 jobs would be supported this year.

According to CEO of Oil & Gas UK Deirdre Michie, unit operating costs have fallen from almost $30 (£20.8) a barrel last year to around $17 (£11.8) a barrel this year however “further efficiencies” need to be seen to protect the industry and the skilled jobs it provides.

She adds: “The industry has been spending more than it is earning since the oil price slump towards the end of 2014. This is not sustainable and companies have been faced with some very difficult decisions.

“To survive, the industry has had no choice but to improve its performance. It is looking to find efficiencies to restore competitiveness, to attract investment and stimulate activity in the North Sea. With up to 20 billion barrels of oil and gas still to recover, this region is still very much open for business.”

Another report suggested the North Sea will see an increase in infrastructure deals this year despite low oil prices.