Despite near-record investment in the past year, it has failed to reverse the year-on-year decline in North Sea oil and gas production.

The survey also noted the upward trend in monthly output changes came to an abrupt end in May, delivering further evidence that the underlying longer-term decline will not be stemmed, said the survey.

According to Thorsten Fischer, an economist with Royal Bank: "Energy security is a strategic issue. Most of the world's proven reserves are located in politically volatile regions around the globe. High oil prices and strong demand growth along with maturing fields in the North Sea and the US have brought about a shift in the balance of power in favour of state-controlled national oil companies, or NOCs. Since NOCs lack the expertise to boost productive capacity, there is scope for multinationals to co-operate.

"However, NOCs are increasingly demanding access to western technology and insist on increasing local input. In order to do business, multinationals would have to be prepared to assume significant legal and political risks.

"On the other hand, multinationals unwilling to step up co-operation with NOCs risk missing out on the most profitable deals. Failure to develop the most readily available resources because it is deemed too risky would be detrimental to energy security, and possibly future wealth."