Jun 15, 2020

BP to take up to $17.5bn assets hit after cutting energy price outlook

BP will slash up to $17.5bn off the value of its assets after lowering its longer-term energy price assumptions in the wake of the pandemic, which it expects to hasten the shift away from fossil fuels. The UK energy major said coronavirus would have a lasting impact on the global economy as well as oil and gas demand, and that it expected the crisis to accelerate the transition towards cleaner forms of energy. BP's price assumptions for Brent crude oil and Henry Hub gas are now lower by 27 per cent and 31 per cent respectively for the period from 2020 to 2050, from 2019 levels. As of March 31, property, plant & equipment was valued at $130.2bn - with the oil and gas component at $88.6bn. BP said intangible assets were tallied at $15.5bn, with $14.2bn related to exploration. BP had already announced an impairment charge of up to $3bn after agreeing to sell a parcel of US assets for less than the value on its books as energy prices fell.

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