BP cuts up to $17.5 billion from assets

BP will write off up to $17.5 billion from the value of its assets after cutting its long-term oil and gas price forecasts, betting the COVID-19 crisis will cast a lasting chill on energy demand and accelerate a shift away from fossil fuels.

Like its rivals, the British oil major is set to take a big hit to revenue from an unprecedented collapse in oil demand due to the pandemic. The impairments are set to raise its debt burden sharply and increase pressure to reduce its dividend. The move comes as Chief Executive Bernard Looney prepares to outline his strategy in September to “reinvent” BP including a reduced focus on oil and gas and a larger renewables business.

BP lowered its benchmark Brent oil price forecasts to an average of $55 a barrel until 2050, down by around 30% from previous assumptions of $70.