Oil major BP on Monday said it was taking up to $ 17.5 billion in charges as it lowers its assumptions for the fossil fuels it sells.
BP said a charge will range from $ 13 billion to $ 17.5 billion in the second quarter, citing both its review of assumptions as it seeks to become net-zero on carbon emissions by 2050 as well as the impact of COVID-19 on the global economy.
“We have reset our price outlook to reflect that impact and the likelihood of greater efforts to ‘build back better’ towards a Paris-consistent world. We are also reviewing our development plans,” said CEO Bernard Looney in a statement.
BP said the pandemic is having an enduring impact on the global economy, with the potential for weaker demand for energy for a sustained period.
BP said it’s now forecasting a Brent oil price BRN00,
BP’s estimate for crude is still well above August futures, which traded at $ 37.40 on Monday morning.
It’s forecasting a natural gas price NG00,
BP said those prices are “broadly in line with a range of transition paths consistent with the Paris climate goals.”
BP said it currently estimates that non-cash, pre-tax impairment charges against property, plant & equipment in the range of $ 8 billion to $ 11 billion, and write-offs of exploration intangibles in the range of $ 8 billion to $ 10 billion.
At the end of the first quarter, BP’s property, plant & equipment was valued at $ 88.6 billion in the oil and gas properties and intangible assets were $ 14.2 billion in the exploration business.
BP shares opened 5% lower in London.
