A survey of small oil and gas companies has found that they expect to scale back on investment and construction, the BBC has reported.

The Ernst & Young Oil and Gas Eye Index plummeted in the three months to June, when 81% of Aim-quoted companies posted falls in their share prices and small energy companies did worse than larger oil firms.

According to the survey, uncertainty around the eurozone caused the lack of growth, as less than a fifth of companies surveyed saw any rise in their stock market valuation during the quarter.

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Ally Rule from Ernst & Young's Aberdeen office said: "The first quarter of the year saw glimpses of light at the end of the tunnel, but that now looks like the glow of an onrushing train of anxiety.

"Markets will remain volatile while the eurozone continues to seek a more permanent solution to the region's problems.

"This will push investors towards safer havens."

"This will realistically result in the delay of development projects, unless companies are willing to court larger, better capitalised partners or acquirers."

The Scotsman reported that the drop in profitability could force small companies to turn to larger firms in a bid to finance their drilling projects.

(NE)