U.S. oil prices have dropped by more than a third from an Oct. 3 high, the largest percentage decline since early 2016. As of Jan. 8, West Texas Intermediate was trading below $50 bbl., the minimum price most big shale companies plan their growth around. That’s down from an average of almost $67 bbl. this year through September, according to Wood Mackenzie Ltd. and RS Energy Group.

Rystad Energy, a Norwegian energy research company, agrees that the offshore recovery will slow, but it will stay on track because the industry has become more efficient and lower costs driven by bankruptcies and consolidations have reduced debt. The company estimates that more than 100 offshore projects will be undertaken in 2019, as opposed to just 43 in 2015. Of those projects, Rystad said, about 30% will occur in the Middle East, 25% in South America, 15% in Africa, 15% in Asia and less than 10% each in North America and Europe.

“We expect 2019 to be a strong year for the Gulf of Mexico. Following four years of decline, exploration activity is expected to increase next year by 30% in the Gulf of Mexico,” Wood McKenzie predicts. “Shell and Chevron will lead the way, but the actual growth in exploration will come from new entrants — Kosmos EnergyEquinorTotalMurphy and Fieldwood,” said William Turner, senior research analyst at Wood Mackenzie.

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