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BP revises its oil and gas price forecasts
BP Considers Writing Up To $ 17.5 Billion Of Its Second Quarter Profit After Sharp Downgrade Of Long-Term Oil And Gas Price Forecasts.
The profit should be received on August 4th. The CEO is expected to Bernard Looney in September will announce its strategy «rethinking» BP course. The strategy implies less emphasis on oil and gas, as well as a shift to renewable energy sources.
BP said the impact of the pandemic will accelerate the course change towards a low-carbon economy in line with the 2015 Paris Climate Agreement targets.
«We have revised our price forecast and plan to make more efforts to fulfill the Paris Pact plan», – said Looney.
He explained that the outbreak of the virus only exacerbated the problem with the prospects for the development of the oil industry in the future, and reminded of the fragility of the ecosystem, adding that renewable reserves have become a very attractive proposition..
BP shares sank about 5% during morning trading.
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British Petroleum has revised its expectations for benchmark Brent crude prices to an average of $ 55 a barrel between 2021 and 2050, while Henry Hub gas prices are forecast to average $ 2.90 over the same period..
Henry Hub is a natural gas pipeline located in Louisiana that serves as the official delivery point for futures contracts on the New York Mercantile Exchange..
BP forecasts for oil and gas futures are down approximately 27% and 31%, respectively, compared to those presented in the group's 2019 annual report.
BP has also sharply increased the estimated price it will have to pay governments for the carbon dioxide emitted from its oil and gas operations. New forecast is around $ 100 per tonne CO2 in 2030, up from previous $ 40 per tonne.
As a result, BP will carry out non-cash write-offs in the second quarter in the range of $ 13 billion to $ 17.5 billion after taxes..
The company will now also revise its plans for some oil and gas projects that are in the early stages of geological exploration. BP said last week it would cut about 15% of its workforce due to the pandemic crisis and as part of Looney's plan to switch to renewables..