AN INQUIRY has begun into the future of the oil and gas industry in Scotland.

The Scottish Affairs Committee will look at challenges facing the sector and how they can be tackled, and ways to secure the future of oil and gas in Scotland as reserves decline.

It will also examine how effective the UK Government has been in supporting the long-term future of the industry and how to maximise the economic return.

The committee said Scotland's oil and gas is central the UK economy, contributing approximately £17 billion to the balance of trade and supporting more than 300,000 jobs.

Recent years have seen a marked downturn in employment in the industry as production levels are in long-term decline, compounded by reduced levels of investment, continued low oil prices and declining tax revenues.

MPs will also examine the environmental impact of oil and gas, particularly in relation to decommissioning and how the skills and infrastructure can be applied to renewables.

Committee chairman Pete Wishart said: "Scotland's oil and gas sector has long been one the UK's strongest industries but has undoubtedly gone through a tough time in recent years.

"The volatility in the price of energy has made some types of oil and gas extraction in the North Sea unaffordable, and caused a significant contraction of the sector.

"Nonetheless, we can be proud of being home to a world-leading, high tech job provider, that supports so many jobs, provides the backbone of our energy mix and vital tax revenue.

"We have launched this inquiry to understand the long-term prospects for the sector and understand what role the government can play in supporting it.

"We'll look at how to maximise Scotland's world-renowned expertise, particularly in relation to growing industries like renewables.

"This will include how we can extract the greatest value from reserves in the North Sea, and how we can ensure the sector in Scotland plays a leading role in oil and gas around the world."