Although facing a difficult year, the UK oil industry is certainly not close to a collapse as suggested by some insiders, Sir Ian Wood has said.
The Scottish oil magnate, who served as a UK Cabinet oil adviser, tried to dispel concerns saying that the sector still has a "significant momentum from major investments made over the last two or three years".
"Comments yesterday that the UK offshore oil and gas industry was 'close to collapse' are over the top,” Wood said, referring to comments made by the chairman of the independent explorers’ association Brindex.
"It's important to have a balanced perspective at this time. The UKCS (UK Continental Shelf) does face a very difficult year to 18 months which will see a slowdown in investment, the loss of some offshore production, up to 10 per cent, and the possible loss of around 15,000 jobs within an industry which employs 375,000, although this is difficult to estimate.
"It will be a tough time for the industry and the people that work in it, but we are entering a downturn from which we will recover."
Even though the short- to medium-term prognosis remains pessimistic, oil prices are still expected to rise in the long-term.
Forecasters Oxford Economics said that although the current supply surplus caused by strong production in the USA as well as decreasing demand from China will keep the prices low over the next three months, by 2020 the price for a barrel will climb to up to $111 (£71) and to staggering $200 (£128) by 2040.
The Chief Secretary to the Treasury Danny Alexander described the recent slump below $60 (£38) a barrel as "a big concern" but insisted the North Sea is "open for business" and backed by government support for decommissioning, investment and exploration.
"We have to accept that there is going to be significantly less tax from North Sea oil and gas because that is necessary to get the investment, to continue to create the jobs and support what is one of the most important employers, not just in Scotland but across the whole of the UK,” he said.
"It is very important to send a message to investors around the world that the North Sea is open for business."
Scottish First Minister Nicola Sturgeon called on the UK government to provide more tax incentives to help the industry survive.
"We need more from the UK government around tax incentives, we need more detail about the implementation of the proposed new investment allowance, we need to be supporting exploration,” she said.
"The Scottish government will continue to do what we can around skills and innovation, but we need serious and very definite measures from the UK government to help."
Stuart Haszeldine, professor of carbon capture and storage at Edinburgh University's School of GeoSciences, has supported her call, urging the government to review "extreme" taxes levied on oil and gas production.
He said it should also provide tax incentives to encourage investment in "enhanced oil recovery", which involves injecting carbon dioxide into mature fields to both decarbonise the atmosphere and extract more oil.
Offshore union RMT has called for a "crisis management" plan to rescue British jobs and infrastructure.
The union said major redevelopment and refurbishment projects will stall due to the fall in investment with the UK taxpayers possibly paying up to £30bn for decommissioning.
"If immediate action isn't taken then we risk turning today's crisis into longer-term damage that would threaten the very core of our offshore industry,” RMT general secretary Mick Cash.
"With tens of thousands of jobs at stake, along with the prospect of lasting damage to infrastructure, production capacity and the safety culture, intervention is absolutely critical."