Energy companies’ earnings are under pressure with oil prices having fallen by a third since the start of the year. Shell’s write-down comes as the industry cuts costs and reins in investments in the face of the health crisis, which has curbed global demand for crude oil by nearly a third in April, according to International Energy Agency estimates.
Shell follows BP in massive write down of fossil fuel assets.
The Wall Street Journal’s assessment, below, is stunning.
“Large amounts of oil and gas are likely to be left in the ground.“
LONDON (AP) — Energy producer Royal Dutch Shell warned Tuesday it will slash the value of its assets by $22 billion to account for lower oil and gas prices amid the COVID-19 pandemic.
The company predicted the write-down for the quarter and said it continues “to adapt to ensure the business remains resilient” in challenging times. Earlier this month, its competitor BP, also cut the value of its own assets by up to $17.5 billion.
Shell predicted prices for Brent crude, the international oil benchmark, would be at $50 dollars a barrel in 2022. Earlier it had predicted a price of $60 a barrel. On Tuesday, it was trading near $41 a barrel.
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