PLEXUS Holdings has said it still can’t tell how long the slump in the oil and gas industry will last as it underlined how tough trading conditions are in the North Sea.

The Aberdeen-based oil services firm gave a sober assessment of the outlook for the sector warning that three years into the deep downturn triggered by the crude price plunge there is little sign of a recovery in key markets.

“How long the downturn will last and how severe it will be of course remains the big unknown,” chairman Jeffrey Thrall told the company’s general meeting.

He added: “Already in its third year these adverse trading conditions have lasted longer than many commentators and leading market players had predicted and until a sustained recovery takes hold, today’s subdued levels of exploration activity and lack of revenue visibility will likely persist.”

Mr Thrall’s comments highlight the scale of the challenge facing oil services firms in Scotland.

Plexus achieved rapid growth in demand for its wellhead systems during the boom in investment in the North Sea. This ended when the crude price started tumbling in 2014, as supplies ran ahead of demand.

However, Mr Thrall noted: “No matter how ground breaking our technology is and how widely it has been used in the field, we can do little in the face of the sharp retrenchment in operators’ budgets that has been seen over the last two years in response to lower oil prices.”

The company’s experience reflects how the impact of spending cuts by oil and gas firms has rippled through the supply chain and the wider economy.

Led by chief executive Ben van Bilderbeek, Plexus slashed employee numbers by almost 50 per cent in the year to 30 June, It cut 76 posts with 157 remaining.

The Aim-listed firm plunged £6.9 million into the red during the year amid what Mr Thrall described as challenging conditions.

He said yesterday Plexus took decisive action we took over the course of the year to help realign the business to the lower oil price environment.

The company raised £11.5m from firms in China and Russia, which expect it to help win business in those areas.

While sector watchers in Scotland may welcome Plexus’s success in overseas markets they may be concerned to note that the company appears to have felt the need to redouble efforts to reduce its reliance on the North Sea.

Mr Thrall noted Plexus is following a strategy to diversify its revenues away from the company’s traditional stronghold in the North Sea to other hydrocarbon jurisdictions.

This partly reflects deep reductions in the kind of exploration activity it has focused on in the North Sea.

However, Mr Thrall said the production cuts agreed at last week’s Opec meeting offered much needed encouragement. They marked a change in tone after two years in which Opec members such as Saudi Arabia had appeared happy to live with low crude prices, which put pressure on US shale producers.

Mr Thrall noted some experts have said cuts in spending on new fields could result in a supply crunch which will boost prices.

He concluded: “We are confident that once sentiment within the sector begins to recover and operators renew their appetite for exploration, Plexus will in turn regain the momentum that existed before the downturn.”

On the implications of the Brexit vote for the UK to leave the European Union, Plexus said last month: “Our current thinking is that staff recruitment when activity levels pick up is not currently a major concern, and weaker Sterling actually makes our products and services cheaper to customers outside of the UK.”

Plexus Holdings shares closed up 8.25p at 73p.