A “CAUTIOUS optimism” is returning to Aberdeen after 120,000 jobs were lost in the oil and gas industry over the last three years.

Accountancy firm Grant Thornton said that while many challenges remained in the city, there were “glimmers of light” following increased visibility in the oil and gas investment market.

Grant Thornton said a more outlook for oil prices and a number of large deals in the sector appear to be restoring some momentum, with businesses emerging from the downturn in more limber shape.

In addition to the estimated 120,000 jobs that have been lost in the industry, the prolonged low oil price has driven significant change within Scotland’s energy sector, forcing businesses to reduce costs, increase efficiency and evaluate how they work with each other.

A barrel of Brent Crude is hovering around the $50 mark having plummeted from $114 in June 2014 to below $50 by the end of January 2015.

Barry Fraser, Grant Thornton’s managing director in Aberdeen highlighted Chrysaor’s $3.8 billion acquisition of assets from Shell as one of a number of upstream deals finalised this year that have contributed to increased confidence over future North Sea activity levels.

“There are undoubtedly many challenges that still lie ahead for the oil and gas sector in Aberdeen, but we’re seeing some glimmers of light after a prolonged period of uncertainty,” he said.

“Many north east businesses are no longer focused on pure survival and are seeing an increase in tender activity and new opportunities, particularly overseas.”

Ian Knott, a director at Grant Thornton in Aberdeen, added that he was seeing a willingness among businesses to change, collaborate and work to maintain efficiencies that have realised.

He also urged the industry to come together to overcome the skills shortages that have arisen in the downturn.

“A significant number of skilled workers have now left the industry, so businesses across the supply chain will need to be willing to invest in training if the industry is to avoid a return to poaching of employees and spiralling wage costs – all of which can have a negative impact on the long term viability of the sector,” he said.