BP, one of the world’s seven oil and gas supermajors, says it expects to undertake a huge reduction in asset value in the range of $13 billion to $17.5 billion as it revises long-term energy price assumptions.
The company told shareholders that it could write down the value of its assets and warned that the pandemic would have a lasting impact on the global oil economy.
The energy giant expects global benchmark Brent crude to average a price of around $55 per barrel from 2021 through to 2050. That’s a reduction of 27% from its previous expectation.
The company recently cut 10,000 jobs in an effort to cope with the global collapse in demand for oil.
What Comes Next?
BP says new long-term price assumptions will impact some of the group’s exploration plans.
The company pledged to become a net-zero company by 2050, but the pandemic has forced them to reconsider their assumptions once more.
“We are also reviewing our development plans,” Looney said. “All that will result in a significant change in our upcoming results, but I am confident that these difficult decisions – rooted in our net-zero ambition and reaffirmed by the pandemic – will better enable us to compete through the energy transition.”