Total SE announced an $8.1 billion writedown after the push to curb carbon emissions and the coronavirus pandemic challenged assumptions about the long-term viability of some oil and gas assets.
The bulk of the impairment -- about $7 billion -- applies to Canadian oil sands, which are costlier and more carbon intensive than conventional fields. Total will not approve any capacity increase on projects of this type and will withdraw from Canada’s oil industry lobby group.
The French energy giant is following its peers BP and Shell, which already warned that they could write down almost $40 billion between them in the second quarter. The size of the impairments shows how the global health crisis, combined with the push to slow climate change, is shaking the industry’s foundations.
ADDING UP: U.S. oil producers wrote down $48B worth of assets in the first quarter
Most major European oil companies had valued their assets using long-term crude prices of $60 to $80 a barrel. That’s close to where international benchmark Brent was trading before the pandemic struck, but is now considered unrealistic in the post-Covid economy. Total expects Brent to average $35 this year.
“Beyond 2030, given technological developments, particularly in the transportation sector, Total anticipates oil demand will have reached its peak and Brent prices should tend toward the long-term price of $50 a barrel,” the company said in a statement on Wednesday.
America’s biggest oil producers are coming under increasing pressure to disclose their long-term forecasts. Exxon Mobil and Chevron don’t publish such estimates, meaning shareholders are less able to scrutinize how their investment plans square with market realities.
Total and Shell report earnings on Thursday, and Exxon and Chevron follow on Friday. All are expected to report big losses for the second quarter.
"heavy" - Google News
July 30, 2020 at 01:37AM
https://ift.tt/3jSkTLS
Total takes $8 billion write-down on carbon-heavy oil assets - Houston Chronicle
"heavy" - Google News
https://ift.tt/35FbxvS
https://ift.tt/3c3RoCk
heavy
Bagikan Berita Ini
0 Response to "Total takes $8 billion write-down on carbon-heavy oil assets - Houston Chronicle"
Post a Comment