NORTH Sea oil and gas companies must collaborate more if the industry is to achieve the efficiency gains needed to ensure the area has a future, experts have said.

Oil & Gas UK said co-operative working will be crucial to helping the industry cope with the slump in the crude price since June, which left many North Sea fields making losses.

The organisation reckons the industry needs to boost efficiency by around 40 per cent within five years to put the North Sea back on a healthy footing.

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A range of oil and gas producers have slashed spending and jobs in the North Sea in response to the price fall. However, Oil & Gas UK warned such cost cutting will only have a limited impact unless it is accompanied by a big change in behaviour in the competitive industry.

Stephen Marcos Jones, Oil & Gas UK's business development director, said: "Companies are having to make tough decisions on their capacity during the downturn and are individually taking measures to improve efficiency. However, co-operative working across the industry ... can also help deliver the cost and efficiency improvements required to secure a long-term future for the UKCS."

Sector watchers have said that one of the challenges facing the North Sea industry is that many fields and assets such as pipelines have multiple owners, who may not be pulling in the same direction. Firms may be wasting significant amounts of money and duplicating work by commissioning services independently rather than with other companies.

Oil & Gas UK said the oil and gas industry needs to learn lessons from sectors such as automotive, which have gone through big changes in response to downturns.

It has commissioned accountancy giant PwC to identify good practices that could be transferred to the oil and gas business from other industries. Signalling the urgency of the task, Oil & Gas UK said it expects the report to be ready next month.

Alastair Geddes, oil and gas consulting specialist at PwC, noted the firm had already found oil and gas companies could boost profits by £3bn just by improving the way they manage their supply chains.

It found oil and gas firms lagged companies in sectors such as engineering by around ten years when it came to managing suppliers.

Mr Geddes added: "While there are many unique factors about the UK oil and gas industry, we believe this study will enable us to draw wider parallels and identify a number of practical lessons. For those leaders who are open to change, incorporating proven, best practice approaches could net significant long term business benefits."

The new Oil and Gas Authority has highlighted the need for increased collaboration in the North Sea. The regulator noted in February that five firms had combined to source cheaper and more secure supplies of gas for powering offshore platforms.

Analysts have warned the North Sea could be hit especially hard by the crude price slump because of the high costs of operating in the area.

Big producers including Shell and BP have announced plans to shed hundreds of jobs and to slash the rates paid to contractors. In February drilling operator KCA Deutag said it would cut 230 North Sea jobs.

However, a prominent oil and gas entrepreneur has suggested it is a good time to invest in the North Sea.

Tom Cross, who runs North Sea-focused Parkmead Group, said on Monday that the sharp fall in the cost of services such as drilling support since last year could encourage firms to bring more fields onstream.