A detailed view of a Shell service station sign showing the low price of $ 1.69 per gallon, the result of the coronavirus outbreak (COVID-19) on March 31, 2020 in Jacksonville, Fl.
David Rosenblum | Icon Sportswire | fake pictures
Oil giant Royal Dutch Shell said Tuesday it will reduce the value of its assets by as much as $ 22 billion in the second quarter, after reviewing its long-term outlook for oil and gas prices.
It comes after the energy company announced in mid-April an ambition to reduce greenhouse gas emissions to net zero by 2050.
Shell said in a statement to investors that it had reviewed a significant part of its business given the impact of the coronavirus pandemic and the “constantly challenging commodity price environment.”
He said he would take added after-tax impairment charges in the range of $ 15 billion to $ 22 billion in the second quarter.
This included a reduction of between $ 8 billion and $ 9 billion in its integrated gas unit, a reduction of $ 4 billion to $ 6 billion in upstream assets and a reduction of $ 3 billion to $ 7 billion in petroleum products in its refining portfolio.
The Anglo-Dutch company’s shares were more than 2.4% lower during the morning deals.
Earlier this month, UK-based energy giant BP also said it would incur non-monetary impairment charges and write-offs in the second quarter, which is estimated to range in aggregate from $ 13 billion to $ 17.5 billion. after taxes.
Oil and gas price forecasts
Shell said it expected international benchmark Brent crude prices to average $ 35 a barrel in 2020, below an earlier forecast of $ 60.
The company also lowered its Brent price forecast to $ 40 in 2021 and $ 50 in 2022, having previously said it expected prices to average $ 60 for each respective year.
Brent crude futures were trading at $ 41.39 on Tuesday morning, a drop of around 0.7%, while western US intermediate futures for Texas were at $ 39.35, more than 0.8% less.
The energy giant also said it believes Henry Hub gas prices will average $ 1.75 per million British thermal units in 2020, before rising to $ 2.5 in 2021 and 2022, and $ 2.75 in 2023.
Henry Hub is a natural gas pipeline located in Louisiana and serves as the official delivery location for futures contracts on the New York Mercantile Exchange.
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