Oil giant Shell said on Tuesday that they will write down the value of their assets by $22 billion during the second quarter after a revision of long-term outlook was conducted in terms of oil and gas prices. The following decision comes after the energy company vowed in mid-April to reduce greenhouse gas emissions to net zero by 2050.
Shell in a statement on Tuesday quoted to their investor board that the significant amount of their business was totaled due to the ongoing pandemic and the “ongoing challenging commodity price environment.”In retrospect, Shell said that reduce aggregate post-tax impairment the range of $15 billion to $22 billion.
The following includes a write-down of between $8 billion-$9 billion in its integrated gas unit, a $4 billion-$6 billion write-down in upstream assets, and a $3 billion-$7 billion write-down in oil products across its refining portfolio. A domino effect plunged down share prices of the Anglo-Dutch company by over 2.4 lower than their regular standing.
Earlier this month, a similar announcement came from U.K’s energy giant BP as they quoted similar grounds quoting that they would downplay assets to be in the aggregate range of $13 billion to $17.5 billion after tax.
Shell further quotes that they expected the Brent price forecast to $40 in 2021 and $50 in 2020, having previously quoted the latter to be priced at $60. Brent crude futures traded at $41.40 on Tuesday morning, down 0.7%, while U.S West Texas Intermediate future stood at $39.35, more than 0.8% low than standing rating.
The energy giant also believes that Henry Hub gas prices will average $1.75$ per million British thermal units in 2020, before rising to $2.5 over in 2021 and 2022, and $2.75 in the year 2023.Oil Player