BOGOTA, April 22 (Reuters) - Private oil companies operating in Colombia will cut planned investments in 2020 by more than $1 billion following the global plunge in oil prices, the private producers association said on Wednesday.
With Brent oil prices below $40 to $45 per barrel, private energy businesses operating in the Andean country will cut exploration investment by around 60%, or $370 million, the Colombian Petroleum Association (ACP) said in a report.
Investment to maintain production will fall by 55%, equivalent to some $670 million, the report said.
Global oil prices have dropped sharply on a combination of lower demand amid the spread of coronavirus and a surge in supply. On Monday the price of a barrel of benchmark U.S. oil plunged below $0 a barrel for the first time in history.
“This is the biggest crisis in the history of the oil industry worldwide,” Francisco Lloreda, head of the ACP, told journalists in a virtual press conference.
“(It is) a price drop never seen before and the beginning of an economic recession that seems to be comparable to the great depression of 1929 that puts the oil industry in Colombia at risk, especially private companies,” he said.
Last week Lloreda told Reuters in an interview that crude oil production in Colombia called fall by 100,000 barrels a day this year if Brent oil prices fell below $25 a barrel.
On Wednesday international benchmark Brent crude fell to a two-decade low of $15.98 a barrel, before recovering later in the session.
Below $25 a barrel, cuts in investment could fall by an additional 10 to 15 percentage points, the ACP added.
Reporting by Oliver Griffin; editing by Diane Craft