BP boss Bob Dudley gave a sober assessment of the outlook for oil prices yesterday but insisted the company still expects to enjoy a long future in the North Sea, which is seen as a high cost area.

While a recent report suggested BP could quit the North Sea entirely, the US executive made clear the oil giant thinks it will make plenty of money from the bumper fields it is developing off Shetland.

His remarks underline BP’s faith in the potential of projects that were approved years ago, when oil was trading at around twice current levels.

The enthusiasm partly reflects the fact the Shetland finds are so big they can be run fairly cheaply on a cost per barrel basis using modern technology.

BP’s bullishness on Shetland may encourage others to consider drilling in what remains an under-explored area.

The company’s enduring faith in Shetland may have something to do with the sharp falls in the costs of services seen in the North Sea amid a downturn that has left suppliers jockeying for position in a shrinking market.

Many have fallen by the wayside since 2014 amid a process of retrenchment accompanied by hefty job losses.

BP has shed hundreds of posts in its efforts to boost efficiency.

Comments from Aim-listed i3 yesterday suggest the pressure on the supply chain remains intense.

The fall in costs has helped i3 to win backing for plans to develop a Moray Firth find that may have been left idle under the control of a bigger firm.

The company has identified a range of undeveloped fields it thinks could be brought into production.

Some think a large scale transfer of assets into the hands of firms that are more likely to invest in them is required in the North Sea.

It will take some time before it becomes clear whether the downturn will result in such an ownership change.