UK oil and gas output should average around 2.2 million barrels of oil equivalent per day (boepd) this year, down from 2.3 million boepd in 2010, and is likely to fall by around 3 percent a year over the next five years, it said.
This would be a much slower rate than the fall over the last decade, which has been averaging 6-7 percent annually.
Investment in British oil and gas fields, which span the North Sea and waters west of Scotland, could reach 8 billion pounds ($12.94 billion) this year, up from 6 billion pounds in 2010 and 4.9 billion in 2009, Oil & Gas UK quoted an industry survey as showing.
With new investment running at such a high rate, Oil & Gas UK Chief Executive Malcolm Webb said the life of Britain's maturing oil and gas regions were being extended.
"I would think we could be producing only slightly under 2 million boepd in five years' time — quite a bit higher than we had been expecting," Webb told Reuters in an interview.
"People have been writing the UK oil and gas industry off and assuming its life is almost over. That is a mistake."
UK oil and gas output peaked in 1999 at 4.5 million boepd and has been declining steadily since then.
Peak production has passed at many of the country's biggest oilfields and the rate of discovery of new wells has gradually slowed despite exploration in much deeper waters and in areas far further offshore.
But Oil & Gas UK believes Britain still has reserves of up to 24 billion barrels of oil and gas. It says that although much of the easy oil and gas has been recovered, huge reserves of hydrocarbons remain in the ground.
"Most of the oilfields still have around half of their original reserves in place," Webb said. "The challenge is to try to get hold of as much of that as possible."
Improvements in technology are allowing oil and gas companies to pump an increasing proportion of reserves to the surface and to collect hydrocarbons from fields that would previously have been inaccessible.
This has helped extend the life of the UK oil and gas industry and slow dramatically its rate of decline.
But costs have risen and unit operating costs jumped 10 percent last year as production fell.
"New discoveries, while sizeable and numerous by recent standards, were materially smaller than those found in younger oil and gas provinces elsewhere," Oil & Gas UK said in a statement.
The UK oil and gas industry also faces decommissioning costs of 29 billion pounds over the next 30 years, it said, up 11 percent over last year's forecast.
