Shell will write down $ 22 billion in assets to meet Covid-19 and climate commitments

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(Agence Ecofin) – Shell will depreciate its assets by $ 22 billion in the second quarter of 2020. A movement induced by the coronavirus pandemic and the commitments of carbon neutrality made by the oil giant for the 2050 horizon. Decrease also planned for production, the sale and price of oil.

The oil company Royal Dutch Shell is forecasting a $ 22 billion depreciation in its assets due to the coronavirus crisis, which has led to lower oil and gas price forecasts. This decision is also part of the oil giant’s plans to achieve carbon neutrality by 2050.

For the second quarter of 2020, the company capitalized at $ 126.5 billion will increase its total charges for impairment from $ 15 to $ 22 billion, reports Stock Exchange Zone. It also expects fuel sales to drop 40% in the second quarter of 2020 compared to the same period in 2019, mainly due to travel restrictions.

The company also projects declining oil and gas production. 2.35 million bpd in the second quarter of 2020 against 2.71 million in the first quarter. It also lowered its oil price forecast to $ 35 per barrel for 2020 from $ 60 in 2019. For the years 2021 and 2022, it also revised its price forecast down from $ 60 to $ 40 and $ 50 respectively.

The company, which is the world number one in service stations, is not the only one in its sector to increase depreciation. Its competitor BP announced for its part a depreciation of $ 17.5 billion, due to the upcoming switch to low-carbon energies.

Gwladys Johnson Akinocho

Also read:

04/16/2020 – Oil giant Shell unveils plan to achieve carbon neutrality by 2050

07/09/2019 – Disappointed with Shell’s environmental policy, Sarasin & Partners divests 20% of its shares there

06/21/2019 – Exxon Mobil Loses Shareholder Due to Reluctance to Better Engage Against Climate Change

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