BP To Write Off Up To $17.5bn After Reduced Oil Price Forecast

By Donna Ahern
BP To Write Off Up To $17.5bn After Reduced Oil Price Forecast

BP will incur an up to $17.5 billion writedown in the value of its assets after lowering its long-term oil and gas price outlook in expectation of an accelerated transition away from fossil fuels, the oil major said on Monday.

In a statement, BP said that the aftermath of the new coronavirus pandemic will accelerate the pace of transition to a lower-carbon economy.

'Revised Assumptions'

BP revised its assumptions for benchmark Brent crude oil prices to an average of about $55 a barrel between 2021 and 2050.

It will also assume the price of Henry Hub gas at $2.90 per million British thermal units.

ADVERTISEMENT

"The revised prices are around 30% lower than previous assumptions," a company spokesman said.

As a result, BP will take non-cash impairment charges and write-offs in the second quarter in a range of $13 billion to $17.5 billion after tax, the company said.

News by Reuters, edited by Donna Ahern, Checkout. Click subscribe to sign up for the Checkout print edition.

Stay Connected With Our Weekly Newsletter

Processing your request...

Thanks! please check your email to confirm your subscription.