INVESTMENT in the North Sea will plunge by around 30 per cent this year amid the slump in oil and gas prices triggered by the coronavirus experts have warned.

Rystad Energy has forecast that spending on new North Sea assets will fall to $5.6 billion this year (£4.5bn) from $7.8bn in 2019.

The forecast by the energy consultancy highlights the scale of the challenges facing companies working in the North Sea as they grapple with the fallout from the coronavirus.

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A range of companies have announced plans to slash spending on new developments and to shed jobs in response to the fall in the oil price in recent weeks.

Industry body Oil & Gas UK warned in April that 30,000 jobs were at risk in the North Sea supply chain.

The outlook in terms of investment appears to have got more gloomy in recent weeks.

Rystad expects global investment in new assets to fall by 29% this year to a 15-year low of $383bn, from $539bn in 2019. At the start of the crisis Rystad expected total investment to fall by up to 20%.

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The Scottish Goverment yesterday launched a £62m Energy Transition Fund. This will help oil and gas firms respond to the challenges posed by the coronavirus and to diversify over the next five years into areas such as renewable energy.

Rystad's analysis suggests the North Sea is likely to be hit harder than some other areas. It expects total global investment in offshore projects to fall by around 15%.

The North Sea is regarded as a mature basin. While oil and gas firms cut costs in the area amid the downturn that followed the crude price fall from 2014 to 2016, it is still seen as a relatively expensive area to operate in.

The Rystad forecast is based on an analysis of recent announcements by more than 100 oil and gas companies around the world.

Brent crude fell to an 18-year low of $15.98 per barrel in April as demand for oil and gas collapsed in response to the lockdowns that were imposed around the world.

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The price has rallied following moves by major exporters to support the market and the easing of lockdown measures in some countries but is still well down on the year. Brent sold for around $39/bbl yesterday, against about $70/bbl in January.

Rystad has warned the price could fall if there are fresh spikes in coronavirus infection rates or exporters renege on promises to cut production.