There was further evidence of the toll that the fall in oil prices has taken on the North Sea in a report that showed that drilling activity has dropped by more than half since last year.

There was further evidence of the toll that the fall in oil prices has taken on the North Sea in a report that showed that drilling activity has dropped by more than half since last year.

Oil and gas industry specialists at Deloitte, the accountancy giant, found that there were just 15 exploration and appraisal wells drilled in the UK North Sea in the second quarter, down 57% on the same period last year.

The numbers point to a dramatic reduction in spending on the search for the oil and gas fields that the UK will rely on to fuel future consumption.

They reflect the strain felt by oil and gas firms following the fall in oil prices from a record $147 a barrel in July to around $60 currently amid the global economic slowdown.

With second quarter drilling activity down 17% on the first quarter, the recovery in oil prices from a low of $40 a barrel in March does not appear to have prompted firms to accelerate investment.

Following a period in which survey data encouraged hopes that the global recession may have ended, oil prices have come under fresh pressure recently amid renewed concern about the outlook for the economy.

Yesterday oil prices dropped below $60 in New York, continuing a seven-day slide with new consumer and employment data casting a pall over energy markets.

Benchmark crude for August delivery fell 15 cents to $59.99 a barrel, after rising above $73 per barrel last week.

The latest in a series of downbeat reports about activity in the UK North Sea will lend weight to industry leaders' demands for the government to introduce measures to encourage investment.

These will be supported by the fact that Deloitte found that the number of explora-tion and appraisal wells drilled in the Norwegian sector of the North Sea jumped to 18 in the second quarter. This represented an increase of 50% on the same quarter in 2008 and 29% on the first quarter of this year.

The Norwegian government provides generous tax breaks to encourage investment in new fields.

Separately, trade sources said maintenance work would more than halve crude oil production from the giant Forties stream in the North Sea next month, in a move they said could support oil prices.

An average of about 310,000 barrels per day will be shipped via the Forties system from fields including Forties and Buzzard, down from 658,000 bpd in July.