BP Predicts Impairments of up to US$17.5 Billion in 2Q20

BP has said that it is expecting estimated 2Q20 non-cash impairment charges and write-offs to be in an aggregate range of US$13 billion to US$17.5 billion post-tax. The prediction comes as a result of the company’s expectation of weak demand for energy for a prolonged period and a faster transition away from fossil fuels due to the ongoing Covid-19 pandemic.

BP’s revised investment appraisal long-term price assumptions are now an average of around US$55/bbl for Brent and US$2.90 per mmBtu for Henry Hub gas, from 2021 – 2050. These lower long-term price assumptions are considered by BP to be broadly in line with a range of transition paths consistent with the Paris climate goals. BP has also revised its carbon prices for the period to 2050 and these now include a price of US$100/teCO2 in 2030…

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