OIL and gas firms will invest £44 billion in new projects in the North Sea in the next five years, according to research findings which underline the strength of activity in the area.

The prediction is included in a report by the Wood Mackenzie energy consultancy, which says the UK continental shelf remains one of the world’s top ten areas for investment around 40 years after production started.

Describing the UK North Sea as a remarkable success story, Wood Mackenzie said spending on new projects had returned to levels last seen in the 1970s after allowing for inflation.

“We forecast that £44bn development capex (capital expenditure) will be invested over the next five years. Another strong indication of the heath of the sector –maybe life does begin at 40,” said Wood Mackenzie.

The prediction is based on plans companies have announced to develop new fields and extend existing assets along with projects Wood Mackenzie believes will proceed.

In February, Oil & Gas UK predicted capital investment in the North Sea would increase to £13bn this year after surging to £11bn last year. The industry body said investments totalling almost £100bn were in companies’ plans, covering an undefined period.

The boom is being driven by oil and gas firms’ efforts to maximise production to capitalise on strong global demand.

Wood Mackenzie noted that advances in technology in areas like heavy oil production had also made it possible to develop assets that would previously have been considered uneconomic. Some 126 companies hold acreage in the UK North Sea – higher than in any other European country.

However, Wood Mackenzie said instability in the tax regime remained a concern. There have been three tax increases in the past ten years, although the Government has granted concessions since the last one in 2011. Wood Mackenzie said since the first North Sea oil fields were developed, nearly £300bn had been invested in upstream development.