Colombia’s oil production will be lower than previously expected due to low prices caused by the double price shocks of low demand because of the novel coronavirus and high supply, the president of the country's National Hydrocarbons Agency (ANH) said April 30.

In a virtual press conference alongside Colombia’s minister of energy, Maria Fernanda Suarez, ANH president Armando Zamora said if Brent oil prices hit about $35 per barrel national oil output could average around 850,000 barrels per day, down from a previous forecast of 900,000 barrels.

“If prices were to fall drastically to an average of around $30 this year, well then we would be talking about average production close to 790,000 to 800,000 barrels a day,” Zamora said.

An average of around $35 per barrel of oil was the most probable scenario, he said.

Global oil prices have dropped sharply on a combination of lower demand amid the spread of the coronavirus and a surge in supply.

Producers in Latin America’s fourth-largest economy have not escaped the impact of falling prices. Last week majority state-owned company Ecopetrol issued a profit warning connected to the crisis.

In the private sector, low prices will prompt cuts to planned investments.

The Colombian Petroleum Association expects private oil producers in the Andean country to cut investment by over $1 billion in 2020 with Brent oil prices below a range of $40 to $45 per barrel.

Brent crude futures were trading at around $25 per barrel April 30. The price index fell to $15.98 per barrel earlier this month, its lowest level since June 1999.

If Brent prices remain at current lows of around $25 a barrel the average national daily output in Colombia could fall to around 750,000 barrels, Zamora added.

Prices for the year in a range of $25 to $45 per barrel will also lead to a cut in exploration activities, Zamora said.

The country previously expected that, with oil prices in a range of $60 to $65 per barrel, some 42 exploration wells would be drilled in 2020. Now it expects 20 to 33 wells, he said.

“We have already been informed that nine wells have been postponed,” Zamora added, explaining postponed wells are expected to be completed next year or in 2022.