Across the shale industry, output growth will slow next year, Sheffield said on Nov. 5. That will provide a boost for prices through the early 2020s, he said.

“U.S. shale production on a year-over-year growth basis will be considerably less powerful in 2021 and later years than most people currently expect,” Papa said during an earnings call for Centennial Resource Development Inc., his current company.

To be sure, both the shale and offshore sectors will continue to produce. Sheffield sees about 700,000 barrels a day being added next year in U.S. shale fields while the Energy Information Administration predicts daily production will expand by 910,000 barrels. Even that, though, would be half of last year’s increase.

In early 2020, Exxon Mobil Corp. is expected to begin producing oil from deepwater wells off the coast of Guyana that have the potential to produce more than 6 billion barrels. Meanwhile, eight new projects are opening in the Gulf of Mexico this year and in 2020, according to an Oct. 16 report by the U.S. Energy Information Administration.

Even so, the Gulf’s share of U.S. production overall is expected to shrink, the EIA report said, to about 15% from 23% in 2011. In 2014, the industry had 245 floating rigs working globally, according to Evercore ISI. Now there are less than half that number, and contractors are trying to manage through the downturn. Valaris Plc, one of the biggest owners of offshore rigs, announced Tuesday a new round of cost cuts adding up to at least $100 million as executives “fully recognize the continued pressures in the current market environment,” according to a statement.

Some workers in the industry see few silver linings ahead.

“The fracking technology has just opened up so much more oil,” said Chip Keener, a former manager of the global rig fleet for Transocean Ltd., the biggest owner of deepwater rigs. “Deepwater I think is going to be on the skids for a very long time.”

This article provided by Bloomberg News.
 

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