THE SNP's favourite oil expert has painted a stark picture of the future of the North Sea, warning that it would not generate substantial tax revenues for the "foreseeable future".

Professor Alex Kemp, who has been hailed by energy minister Fergus Ewing as one of the world’s leading oil economists, said that companies would have to cut exploration costs by 30 per cent and costs of developing and running production faculties by 20 per cent to make money.

The findings, which the University of Aberdeen academic published in a paper co-written with colleague Linda Stephen, are likely to make grim reading for those who are keen to hold a second independence referendum over the course of the next Holyrood parliament, showing the economic case is weaker than it was in the run-up to last year's vote.

Professor Kemp said: "Oil tax revenues have come right down. In 13/14 they were £5 billion, in 15/16, according to the budget, they'll be £0.7bn. That's very big. The case for independence is not just about oil, all I'm saying is we can expect oil revenues to be relatively low for quite some time ahead."

According to scenarios in Scottish Government's White Paper, which set out the case for independence, "offshore receipts" would have been worth between £6.8 billion and £7.9 billion, around 12 per cent of the total tax take, in 2016/17.

However, with an oil price slump from around $115 dollars a barrel last June to around $50, Scottish Government forecasts have since been downgraded to between £500 million and £2.8 billion for next year, and are expected to remain at roughly the same level until the end of the decade.

Professor Kemp said that oil firms could make savings due to reductions the cost of hiring rigs, while further tax reductions could also help. He is currently working on a new study which will examine the impact of further tax breaks, going beyond what has already been announced by George Osborne in his summer budget.

He added: "But even with zero tax, unless costs come down returns will still be negative. Cuts will not just be by making people redundant, they have got to be careful about that. Drilling rig companies have done extremely well over the last 10 years, that's one example of where money could be saved."

SNP MSP Mark McDonald said that Scotland remained the largest oil producer in the EU. He added: "No other country in such a position would have it suggested that it could not finance itself or be self-governing.

"Norway, like every other oil producing nation except the UK, has had the sense to create a fund to mitigate fluctuations in the price of oil – that is now the biggest sovereign wealth fund on the planet and is valued at more than £500 billion.

"But Scotland's economy is built on much more than oil. We already more than pay our way, with more revenue raised per head than the UK for every one of the last 34 years, and inward investment is booming at record high levels. Even without oil and gas, Scotland’s output per head ranks third of the 12 countries and regions of the UK, behind only London and the South-east."

Lewis Macdonald , Scottish Labour's public services spokesperson, said there was a "jobs crisis" and called for more action to help workers whose livelihoods relied on the North Sea energy industry.

He added: "The problems facing the Scottish oil industry are far too important to keep quiet about because it is politically embarrassing for the SNP Government in Edinburgh. This is a jobs crisis affecting families across Scotland, not just about workers in the oil industry but households whose jobs are in the supply chain as well. For years those working in the oil industry and supply chain have made a massive contribution to our economy. In their hour of need it's time for us to give something back.

"Experts have estimated that 65,000 jobs have been lost across the UK and that means tens of thousands in Scotland, these losses are larger than when Ravenscraig shut its doors or the aftermath of the coalfields being shut down.

"It's time for the SNP Government to move on from the politics of the referendum and act on this jobs crisis. They must publish an assessment of the impact this has had across Scotland. This crisis goes beyond the shores of the North Sea and into homes across the country."