BP has told investors they are rethinking their long-term plan, as they evaluate the toll of COVID-19 and the reliance on fuel and gas in their move towards becoming a carbon zero company by 2050.
In a statement issued earlier this week the fuel giant said they were reviewing both their portfolio and capital development plans in anticipation of a sustained weakened energy demand due to the economic fallout from COVID-19 and a global push towards lower carbon energy options, which were perceived as more stable.
Investors were told BP plan to write off up to $17.5 billion in the second quarter as they ‘revise and lower’ long-term price assumptions.
BP CEO Bernard Looney said the company had been developing a more diversified strategy and had reset their price outlook in line with expectations countries would transition towards more sustainable energy options as they recover from the global pandemic.
“So, we have reset our price outlook to reflect that impact and the likelihood of greater efforts to ‘build back better’ towards a Paris-consistent world. We are also reviewing our development plans. All that will result in a significant charge in our upcoming results, but I am confident that these difficult decisions – rooted in our net zero ambition and reaffirmed by the pandemic – will better enable us to compete through the energy transition,” Mr Looney said.
Their revised, lowered investment appraisals include Brent, Henry Hub gas and their carbon prices, while their intagible exploration assets were also anticipated to take a hit.
BP’s second quarter 2020 results are due to be released in early August.