AS buds appear on Scotland’s trees a flurry of deals in the North Sea has encouraged hopes of recovery for the hard-pressed oil and gas sector but some may feel it unwise to assume these will be realised.

After a range of firms slashed spending in the North Sea in response to the slump triggered by the coronavirus crisis, some investors appear to have decided now is the time to go large in the area.

NEO Energy has come out of nowhere to put itself on course to become one of the biggest independents by clinching eye-catching deals in quick succession.

READ MORE: US oil giant sells bumper North Sea portfolio amid shake-up in area

In February NEO, which is backed by Norwegian private equity firm HitecVision, agreed to buy the bulk of the North Sea portfolio amassed by US giant ExxonMobil for around $1 billion (£0.7bn).

Earlier this month it bought another swathe of North Sea acreage through the acquisition of Zennor Petroleum, for up to £450m.

The deals came within months of NEO making a mark on the North Sea through the purchase of assets from French giant Total.

NEO boss Russ Alton has made clear the firm plans to grow rapidly.

Another firm backed by Norwegian investors, Waldorf Production, last week turned heads by agreeing to acquire the North Sea assets that generate most of Edinburgh-based Cairn Energy’s revenues in a £330m deal. This gave Waldorf stakes in the bumper Kraken heavy oil field East of Shetland and the Catcher development off Aberdeen.

Cairn is buying Shell's onshore assets in Egypt with a partner in the country.

A veteran North Sea deal-maker Andrew Austin has just nailed the first deal for his new venture, Kistos, by acquiring Tulip Oil of the Netherlands for an initial €220m (£190m).

READ MORE: North Sea entrepreneur eyes more deals after £250m sale of business he built

The deal came nine months after Mr Austin sold the RockRose business that he developed amid the last downturn to a newcomer, Viaro Energy, for around £250m.

Viaro, which has won funding from Middle Eastern investors, went on to buy the North Sea gas production portfolio that Scots energy giant SSE had developed.

With so many investors committing so much in such a short space of time, surely talk that the coronavirus crisis will hasten the decline of the North Sea significantly must be mistaken?

Those who hope the North Sea oil and gas industry will generate valuable jobs and tax revenues for years might like to think so.

Glass half empty types will feel, however, that it is too soon to talk of recovery for an industry that it is thought has shed around 30,000 jobs over the past year.

If the eagerness of NEO et al to buy assets is striking, then so too is the willingness shown by the likes of ExxonMobil to agree to what look like bargain-basement deals.

READ MORE: Cut-price exit from North Sea by Scots energy giant bodes ill for basin

When ExxonMobil put its North Sea assets up for sale in 2019, talk was it was looking for around $2 bn.

The giant may have settled for a much lower valuation because it wants to free up funds to invest in areas it reckons offer much better prospects. These include the shale fields of the US and offshore Guyana.

ExxonMobil has retained ownership of some Southern North Sea gas assets and a petrochemicals plant in Fife. That may have been because NEO did not want them.

SSE sold its North Sea assets to Viaro for £120m in December, having written their value down by around £460m in recent years. The assets include an interest in the huge Laggan-Tormore development West of Shetland.

Meanwhile Scottish Gas owner Centrica has spent months trying to sell its Spirit Energy business, which has stakes in West of Shetland assets that have lost some of their lustre.

READ MORE: Scottish Gas owner slashes valuation of Shetland exploration acreage

Spirit bought into acreage on which Hurricane Energy made what looked like big finds. Hurricane subsequently slashed estimates of the size of these after hitting problems.

It remains to be seen what buyers will do with the assets that are set to change hands. Those concerned about the state of the North Sea supply chain will hope the new owners are ready to invest in new developments rather than running their portfolios as cash engines.

Following the recovery in crude prices to around $67.50 per barrel that has accompanied the roll out of coronavirus vaccines, firms can make good profits on the output from at least some North Sea fields.

However, the latest state of the industry report from OGUK (Oil & Gas UK), which was released on Monday, underlined how tough things are in the North Sea and the need for a massive increase in investment.

OGUK noted that firms cut spending in the North Sea by £3.4bn last year, to £11.6bn, the lowest total since 2004 in real terms.

READ MORE: Oil giant Shell to cut hundreds of Aberdeen jobs

The industry body said that it is likely that the basin is entering a period of longer-term production decline. The short-lived increase in output that followed the completion of projects approved in better days will end as ageing fields run dry.

The coronavirus crisis prompted a leading independent, EnQuest, to give up on plans to restart production from two fields it had taken offline to get work done on related facilities.

OGUK underlined the need to top up the pipeline of large projects that could be in the running for approval if macroeconomic conditions are supportive.

It warned: “A steady stream of investment in new fields is required to ensure the effective management of decline rates.”

But that will require North Sea firms to beef up exploration budgets, which have been slashed in recent years.

Just seven exploration wells were drilled last year, the lowest total since 1965.

The new owners of North Sea assets that are sold amid the downturn may look to supply chain firms to help them boost returns.

READ MORE: Minnow secures backing from City as it eyes bumper Moray Firth development

However, OGUK has highlighted the risk that the supply chain could suffer irreversible damage unless the pressure on firms eases soon.

It has held out the prospect that oil and gas sector players could play a key role in supporting the energy transition. This could involve them helping to harness the potential to develop renewable energy assets and carbon capture storage and usage projects in the North Sea.

Aberdeen-based engineering giant Wood has shown how firms can use oil and gas expertise to help win business in other energy markets. Its chief executive Robin Watson this week highlighted the prospect of new entrants stimulating activity in the North Sea.

Not many North Sea services firms have the balance sheet strength that has allowed Wood to invest in growing in renewables amid challenging oil and gas market conditions.

OGUK has spent months trying to get the UK Government to agree to commit to provide support, by finalising a North Sea Transition deal.

READ MORE: Plan for pioneering carbon capture and storage development receives £30m boost

Against that backdrop, sector-watchers in Scotland may have found news that US giant GE has decided to develop a turbine blade manufacturing plant on Teesside a bit worrying to say the least. The plant is expected to employ 750 people.