An unprecedented number of British-based oil and gas companies went into insolvency last year, a new study has shown.
Research has revealed that a record 16 businesses in the UK went bust in 2016, as a backlash against fossil fuels began to have a tangible effect on the sector.
The previous year, just two businesses became insolvent, while in 2012 not a single venture went to the wall.
Experts in the energy industry believe it is likely to be the beginning of a succession of company failures, which could leave a significant number of people out of work.
At the heart of the issue is the fact that climate change is forcing governments around the world to think about how best to make the transition to a low-carbon economy.
This inevitably means a greater emphasis on renewable energy sources.
At the same time, the price of oil has collapsed, pushing many of the UK’s independent oil and gas firms to breaking point.
Unless there is an upward trend in prices, the squeeze on their operations will continue and insolvencies are likely to continue at a similar rate.
Prices have nosedived internationally which means that the number of business failures is far from unique to the UK.
That said, operators in the oil-rich North Sea have faced particular pressures resulting from offshore rig decommissioning costs and a lack of capital investment.
