BP says value of its assets fell as much as $17.5B after oil crash - Houston Chronicle

BP plans to write down up to $17.5 billion in assets after oil prices collapsed during the coronavirus pandemic.

The British supermajor on Monday said the value of its assets is expected to fall between $13 billion and $17.5 billion during the second quarter, when coronavirus-related travel restrictions plunged demand for gasoline, diesel and jet fuel.

BP said it expects oil and gas prices to remain relatively low for decades, predicting that Brent crude will average $55 per barrel and Henry Hub natural gas will average $2.90 per one million British Thermal Units until 2050. The lower price assumptions reflect what the company believes will be a faster move to a lower carbon economy after the global pandemic, the company said.

RELATED: BP CEO: ‘It’s a brutal environment that we face’

“With the COVID-19 pandemic having continued during the second quarter of 2020, bp now sees the prospect of the pandemic having an enduring impact on the global economy, with the potential for weaker demand for energy for a sustained period,” the company said.

BP is bracing for a long recovery from the recent oil bust, planning to run its business next year under the assumption that crude prices will continue to hover around $35 a barrel. In the wake of the oil crash, BP reduced its shale spending by $1 billion this year, cutting the number of operating rigs to one, down from 13 this year.

The company also plans to cut $2.5 billion from its operating budget by the end of 2021, and announced plans last week to lay off nearly 10,000 workers, about 14 percent of its workforce, by the end of this year.

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BP says value of its assets fell as much as $17.5B after oil crash - Houston Chronicle
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