The U.K. is the second-largest liquids producer in Europe (after Norway), producing one million b/d in 2015. This amount is large among European countries but small in the global market, and the U.K. remains a net importer of petroleum and other liquids. More than 97% of its liquids production in 2015 came from offshore fields, where petroleum development projects have long lead times. The majority of the offshore crude and condensate fields that began production in 2015 were approved in 2012 or earlier when oil prices were much higher.

Britain's finance minister George Osborne will cut taxes by 1 billion pounds ($1.41 billion) over five years for energy companies pumping oil from the country's North Sea fields, in a boost for an industry suffering low crude prices.

Sparking fears for the long-term future of the industry, the UK upstream segment is expected to approve fewer than £1 billion in spending on new North Sea projects compared with an average of £8 billion/year over the past 5 years, according to Oil & Gas UK’s 2016 Activity Survey.

French oil company Total SA said Monday that a deep-water natural-gas project west of the Shetland Islands called Laggan Tormore will produce the equivalent of 90,000 barrels of oil a day—almost 6% of the U.K.’s total output.

In addition to a £250m UK City Deal signed earlier in the day, the PM has set out an action plan of further measures to help build a bridge to the future for the industry, which is vital for our energy security and has been at the heart of the UK economy for decades, generating jobs, skills and growth.

British wholesale gas prices have fallen over 40 percent in the past year, as mild winter temperatures softened demand amid a sell-off in crude oil markets to which seasonal gas contracts are indirectly linked, and pressure has been mounting on power companies to lower retail prices for households.

“While the UK offshore oil and gas industry is having to adapt to the low oil price and driving greater efficiencies throughout its operations the fact is that the value of our product has more than halved," she said. "Times are really tough for this industry and for the people working in it. We will continue to see job losses as we move into 2016 and we must be thoughtful and supportive of our colleagues and their families who are being made redundant or who are at risk of being made redundant."

Low oil prices have hurt manufacturers that supply and service the sector

Britain's oil and gas sector has lost over 5,000 jobs since late 2014 as a slump in oil prices has severely squeezed oil companies' budgets and led to project cancellations.

The U.K. government will make keeping the lights on the top priority with natural gas and nuclear power playing a central role in that goal, Energy and Climate Change Secretary Amber Rudd is expected to say in a major speech later Wednesday setting out a new energy policy for the country.