CAPITAL investment in North Sea oil and gas has fallen by more than 20 per cent for the second consecutive year, new figures have revealed.

However a slight increase in production and prices boosted the sector in other ways.

Official statistics showed oil production stagnant in 2016/17 but gas production up 8.8 per cent, meaning the oil and gas sector as a whole grew 2.9 per cent to 74.7m tonnes.

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Because of a recent upturn in the price of crude, the value of sales was up 15.2 per cent to £17.5bn, with production in Scotland accounting for 82 per cent of the UK total.

However capital investment was down 20.5 per cent, from £10.1 bn to £8bn.

This followed a fall of 23.9 per cent in 2015/16, down £2.1bn from £13.3bn in 2014/15.

Operating expenditure, excluding decommissioning, was estimated to be £5.9bn - similar to the previous year despite the increase in production, suggesting greater efficiency.

The data emerged as Nicola Sturgeon visited Aberdeen for the final meeting of the Energy Jobs Taskforce, which was set up in 2015 to help the north east cope with the oil price slump

It is being wound up after helping 800 companies and 4200 people facing redundancy.

Its work will now be absorbed into the Oil and Gas Industry Leadership Group co-chaired by SNP energy minister Paul Wheelhouse.

The SNP Government said that under the taskforce spending on oil and gas innovation almost trebled last year, with £15.9m from Scottish Enterprise for 82 firms and 111 projects.

The First Minister said: “The Energy Jobs Taskforce has been a catalyst for culture change, ensuring companies innovate and remain competitive while helping thousands of individuals.

"It has made a vital contribution to strengthening the oil and gas sector, laying the foundation for a positive future for the North Sea economy.

“With employment levels beginning to stabilise, the signs of improvement are encouraging.

"However, I fully appreciate that challenges remain and we will continue to work with industry to ensure the recovery is sustained.”

Reacting to the latest North Sea figures, Mr Wheelhouse added: "Scotland's oil and gas industry has a bright future, and it is encouraging to see this continued increase in production which has risen by a total of 25 per cent over the last two years.

"These figures show that confidence is continuing to return to the sector after a number of challenging years."