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Friday, 29 March 2024

Bleak oil outlook cuts $17.5 bln off BP assets

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Bleak oil outlook cuts $17.5 bln off BP assets
Bleak oil outlook cuts $17.5 bln off BP assets

BP has written down its assets by $17.5 billion after concluding that oil prices will stay weaker than it expected for a long time.

Julian Satterthwaite reports.

BP has wiped 17.5 billion dollars off the value of its assets.

That after it concluded the current crisis would cast a lasting chill over energy demand.

The UK giant now thinks oil will average 55 dollars a barrel until 2050.

That’s down from its earlier assumption of 70 dollars.

It’s the weakest outlook among all European energy firms, according to Barclays research.

BP says the aftermath will also accelerate moves towards a low-carbon economy, further affecting demand.

The bleak outlook comes as chief executive Bernard Looney prepares to unveil a new strategy in September.

Last week the firm said it would cut about 15% of its workforce in response to the crisis, and as part of Looney’s strategy.

He wants to reinvent BP with a reduced emphasis on oil.

The company is expected to shift its fossil fuel output more to natural gas, and step up its presence in renewable energy.

But Monday’s writedown will sharply increase BP’s debt burden, and raise pressure to cut dividends.

By early afternoon, its shares were down over 5%.

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