"Our database of the industry's new oil & gas developments shows that 2017-19 is likely to see the largest increase in mega projects production in history, as the record 2011-13 capex (capital expenditure) commitment yields fruit," the analysts said.
"A key unknown is how well the industry will delivery (on the projects)… the industry has been poor at delivering historically, but has much improved in the last three years," they added.
Crude oil prices extended losses during Asian hours on Wednesday, after the American Petroleum Institute reported late Tuesday U.S. hours that the country's crude inventories rose 4.5 million barrels to 533.6 million barrels at the end of last week, beating expectations of a 2.8 million barrels increase.
Such rise in oil stocks and increase production in the U.S. are undermining efforts led by the OPEC to cut supply in order to support prices.
The cartel agreed to reduce output by 1.2 million barrels per day from January to June this year and was joined by other major producers led by Russia that pledged an additional 558,000 barrels per day in cuts.
Ahead of its meeting in May, there have been talks that OPEC is considering extending those production cuts beyond June as the impact has waned with a supply response by producers outside of the pact, Goldman Sachs said, adding that OPEC's role has transitioned from a price setter to an inventory manager.
The decision to cut output may have stabilized prices for a while, but it unintentionally helped shale producers, the bank said.
"OPEC's decision in November 2016 to cut production was rational, in our view, and fit into its role of inventory manager of last resort," the analysts said.
"However, the unintended consequence was to underwrite shale activity through a bullish credit market at a time when delayed delivery of the 2011-13 capital spending boom could lead to record non-OPEC production growth in 2018," they added.
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