Two out of three oil and gas firms believe the sector has already reached the bottom of the current cycle or will do so within the next year, according to the 25th Oil and Gas survey conducted by Aberdeen & Grampian Chamber of Commerce.

There are still more job cuts to come in oil and gas, but the crisis “could be reaching a turning point,” according to the report.

Confidence levels have improved for both the UK Continental Shelf (UKCS) and internationally over the past 12 months, albeit from the lowest point since the first survey in 2004.

James Bream, research & policy director at Aberdeen & Grampian Chamber of Commerce, said: “We’re likely to remain in an uncertain position through 2017 and ‘the bottom’ will arrive at different times and feel different for each company.

“It is clear that companies are striving to become fitter, leaner and they are working hard to look for new markets to secure their future and employment levels where that is within their control.

“There is no question of complacency in the North-east and our brilliant people will continue to demonstrate that the oil and gas sector should be considered a success story in generating economic value for the UK economy.”

Uisdean Vass, oil and gas partner at Bond Dickinson, said: “The green shoots of recovery may be beginning to push through.

“People are slightly more optimistic about the future for both the UKCS and the international oil industry but the improvement is from a very low point.

“The industry has had to adapt and embrace change and agility and companies are emerging from the oil slump as far leaner operations that are more competitive on price and performance.

“Sadly, this has come at the great cost of many thousands of jobs but companies who have shed staff have simply had to rationalise or die.”

The survey is conducted in partnership with the Fraser of Allander Institute and sponsored by law firm Bond Dickinson.

About 79% of contractors said they would “definitely” or “possibly” be more involved in decommissioning in the next three to five years, and 53% said they would “definitely” or “possibly” be more involved in renewables.

About 70% expect to be involved in “unconventional” oil and gas activity in the UK, with 64% involved outside the UK.