BP to take hit of up to $17.5bn assets as it forecasts lower oil prices

BP group says it will revise down the value of its assets by between $13bn and $17.5bn

                                

Oil major BP has forecast lower oil prices as governments increase plans to cut carbon emissions amidst the coronavirus pandemic.

It has cut price forecasts by about 30 per cent, and expects Brent crude to average $55 a barrel from now until 2050.

As a result, the group says it will revise down the value of its assets by between $13bn and $17.5bn (£13.8bn, €15.4bn).

Last week, the firm announced plans to cut 10,000 jobs following a global plunge in oil demand, as countries ordered people to stay indoors and not travel due to the pandemic.

As a result, the cost of oil fell to less than $20 a barrel at the peak of the crisis, less than a third of the $66 it cost at the start of the year.

BP’s shares were about 4 per cent down in mid-morning trading in London. 

Under new chief executive Bernard Looney, who took over in February, BP is undertaking an overhaul of its business as it looks to become a leaner organisation and a net-zero emissions company. 

In September it will tell investors how it plans to “reinvent” itself and what its pledge to invest less in oil and gas and more in renewables over time will mean in practice.

BP says it has "a growing expectation that the aftermath of the pandemic will accelerate the pace of transition to a lower carbon economy and energy system, as countries seek to 'build back better' so that their economies will be more resilient in the future".

FURTHER READING: BP to cut 10,000 jobs