BOGOTA (Reuters) - The numbers of active oil rigs, which are key for exploration efforts, have fallen dramatically across much of Latin America since restrictions to tackle the coronavirus were implemented, according to figures published by Baker Hughes on Friday.
Oil prices have been battered by slumping demand amid the spread of the coronavirus and a surge in supply, affecting energy companies around the world.
Now data from Baker Hughes, one of the world’s largest oil field service companies, shows a sharp decline in active rotary rigs in countries including Colombia and Argentina.
Rigs are counted weekly and deemed active if drilling for the majority of the week. The results are averaged to produce monthly active rig numbers.
Baker Hughes recorded 25 active drilling rigs in Colombia in March. At the end of March the country began a national lockdown.
In May, just one rig was active in the country, according to Baker Hughes.
“The priority for companies at this time is production,” the head of the Colombian Petroleum Association, Francisco Lloreda, told Reuters, adding that exploratory activity has fallen off the radar.
Initial government forecasts projected 42 exploration wells would be drilled in Colombia in 2020. That was cut to a range of 20 to 33 wells in April.
“For the medium term and from the point of view of Colombia’s reserves, it’s very serious that exploratory activity is practically paralyzed,” Lloreda said.
In Argentina, which started a lockdown on March 20, active rigs fell from 38 in March to just two in May.
In the same month Argentina set a local crude oil reference price of $45 per barrel to help protect energy companies from falling prices.
While most countries in the region had two or fewer active rigs in May, Mexico and Brazil had 42 and 11 active rigs, respectively.
In April Mexico’s energy minister told Reuters the country would press ahead with oil investment and production plans.
Reporting by Oliver Griffin; Editing by Leslie Adler