Oil giant Royal Dutch Shell (NYSE:RDS) said on Tuesday it will write down the value of its assets by up to $22 billion in the second quarter, after revising down 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 portion of its business given the impact of the coronavirus pandemic and the "ongoing challenging commodity price environment."
It said it would take aggregate post-tax impairment charges in the range of $15 billion to $22 billion in the second quarter.
This included a writedown of between $8 billion-$9 billion in its integrated gas unit, a $4 billion-$6 billion writedown in upstream assets, and a $3 billion-$7 billion writedown in oil products across its refining portfolio.
Shell said it expected international benchmark Brent crude prices to average $35 a barrel in 2020, down from a previous forecast of $60.
The firm 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.
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 over 2021 and 2022, and $2.75 in 2023.
Shell stock prices subsided $1.38, or 4.1%, to $32.06.
Related Stories
