BP : Lowers Long-Term Price Assumptions; Sees $13 Billion-$17.5 Billion 2Q Impairments

By Jaime Llinares Taboada

BP PLC said Monday that it has lowered its long-term price assumptions, and that it expects to book non-cash impairment charges and write-offs of between $13 billion and $17.5 billion in the second quarter.

The U.K. oil-and-gas company now assumes Brent prices for crude oil at $55 per barrel for the 2021-2050 period, in line with a range of transition paths consistent with the Paris climate goals. Henry Hub gas is forecast at $2.90 per million British thermal units over the same period.

Chief Executive Bernard Looney said that BP has reset its price outlook to reflect the impact of the energy transition, and is also reviewing its development plants. "All that will result in a significant charge 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."

Write to Jaime Llinares Taboada at [e-mail]; @JaimeLlinaresT