Around 65,000 jobs have already been lost as a result of the UK's contracting oil industry, according to a trade body.

Oil & Gas UK said the figure is equivalent to around 15% of the UK's offshore oil sector workforce. It means that the workforce - in direct, supply chain and indirect employment - is now at around 375,000.

Job cuts were introduced as major oil firms announced cost cutting measures. Oil & Gas UK said businesses cut around £800 million of their annual expenditure this year and expect a further £1.3 billion to be made next year.

The contraction of the oil sector comes after a huge fall in oil prices last year. In summer 2014, Brent crude oil was trading at around $115 per barrel. By Christmas it was less than half that amount. Throughout 2015, oil prices have been fluctuating between $40 and $60 per barrel.

Such a substantial fall in prices equates to a substantial fall in revenues and profits for the oil firms. Oil & Gas UK estimates that revenue in the sector as a whole is down 20% this year, and will drop another 30% next year.

Deirdre Michie, chief executive of Oil and Gas UK, said: "This great industry of ours is facing very challenging times.

"Last year, more was spent than was earned from production, a situation which has been exacerbated by the continued fall in commodity prices. This is not sustainable and investors are hard-pressed to commit investment here because of cash constraints.

"Difficult decisions have had to be made across the industry. It is likely that capacity may have to be reduced still further in order for the business to weather the downturn.

"The industry is under a lot of pressure and it is now widely recognised that a transformation in the way business is done is required if the UK sector is to become more resilient and competitive in a world of sustained lower oil prices".3003