COMPANIES in the UK's oil and gas services industry generate £35bn total revenues a year and the value is set to increase amid booming investment in the North Sea.

The figure comes from a study that highlights the scale of an industry which the authors reckons employs around 200,000 people in the UK.

The study by Ernst & Young suggests the output of firms in the sector is worth much more than previously thought.

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The findings underline the importance of the industry in Scotland, where around 81,000 people work in high value jobs in areas from seismic surveying to drilling.

Annual salaries in the sector averaged £47,000 in 2012.

Around half the oil and gas services businesses the accountancy firm found in the UK are Scotland-based.

The research provides further evidence of the success of firms based in the UK in overseas markets, where expertise developed in the North Sea is in strong demand.

Some 42% of the total revenues booked in 2012 were earned in export markets.

With global demand for energy expected to remain strong for years, the authors predicted a bright future for the UK sector.

They wrote: "The UK oilfield services sector is already a global leader and there are significant opportunities, both at home and overseas, for the sector to continue going from strength to strength."

Welcoming the report, Oil & Gas UK noted the total turnover of the sector had increased by £11.4bn between 2008 and 2012.

The industry body said the growth had been driven by the surge in investment in the UK North Sea, where firms like BP and Shell have sanctioned huge investments in new fields.

Spending on new UK North Sea assets reached a record £14.4bn in 2013. A further £13bn investment is expected in 2014.

But the authors warned the industry faces challenges.

They said: "Attracting new talent to join the industry is vital for the future of the industry."

Gordon Ballard, UK chairman of oil services giant Schlumberger, said the report commissioned by Oil & Gas UK was the most thorough piece of work undertaken to quantify the economic contribution of the supply chain to the UK.

The findings are based on a study of accounts for 2012 filed by 1,585 firms at Companies House.

Oil & Gas UK previously estimated the supply chain generated £27bn sales in 2012, including £7bn exports.

The numbers do not include the revenues generated by firms that produce oil and gas in the UK, like BP and Shell.