By Jonathan Davies

The UK's offshore oil & gas industry suffered its worst performance for four decades in 2014, according to an industry body.

Oil & Gas UK said the industry spent £5.3bn more on investment than it generated through sales as a result of falling oil prices and rising costs.

The body's annual survey also suggested that there will be less investment in oil & gas in 2015, with just 14 of an expected 25 wells drilled last year. And just 50 million barrels of viable reserves were discovered.

Investment grew to £14.8bn in 2014, which was more than expected due to rising costs and projects over running. That figure is forecast to fall to £9.5-11.3bn this year. Oil & Gas UK even suggested that investment could fall as low as £2.5bn within three years.

Chief executive Malcolm Webb said: "Even at $110 per barrel, the ability of the industry to realise the full potential of the UK's oil and gas resource was hamstrung by escalating costs, an unsustainably heavy tax burden and inappropriate regulation.

"At current oil prices, we now see the consequences only too clearly.

"Without sustained investment in new and existing fields, critical infrastructure will disappear, taking with it important North Sea hubs, effectively sterilising areas of the basin and leaving oil and gas in the ground."