North Sea oil and gas companies made the lowest profits in nearly five years during the first three months of this year, new figures showed today. 

The UK's Office for National Statistics said the rate of profit at firms exploring for and extracting oil and gas sank to 27.6% in the first quarter of 2014.

This was down from 31.1% in the last three months of 2013 and the lowest level since the second quarter of 2009. 

"Activity in the oil and gas extraction sector increased by 0.8% in Q1. However the industry has been in long term decline, contracting in every year since 2002," the ONS said. 

Profits from North Sea oil have been a big source of tax revenue for Britain, but the cost of extracting diminishing reserves has increased in recent years, and is one factor widely blamed for the country's weak productivity. 

The ONS added that profits in the sector were closely linked to oil prices. Oil prices in dollars were little changed in the first three months of 2014 compared to the previous quarter, although sterling's strength against the dollar would have reduced the sterling price of a barrel of oil.