Shell cuts its valuation $22 billion as it battles the impacts of the coronavirus on the oil industry
- Oil major Shell says it is writing down the value of its assets by up to $22 billion as it adjusts to
oil's historic crash in recent months. Shellsaid it expects oil prices to level at $50 a barrel in 2022, versus an initial prediction of $60 a barrel.
- Earlier this month, oil major BP slashed its valution by almost $18 billion.
- Oil prices tumbled in March due to a price-war between Saudi Arabia and Russia, and fell further thanks to a lack of demand due to COVID-19.
Oil major Shell will slash up to $22 billion of the value of its assets as the company copes with falling oil prices.
In a second quarter update, the oil major said on Tuesday: "Shell is announcing today a revised long-term commodity price and margin outlook, which is expected to result in non-cash impairments in the second quarter results."Shell said aggregate post-tax impairment charges in the range of $15 to $22 billion are expected in the second quarter. Advertisement
This is the breakdown of the write-downs Shell expects:
- Integrated Gas: $8-9 billion.
- Upstream: $4-$6 billion
- Oil Products: $3-$7 billion across the refining portfolio.
Brent oil, the international benchmark is currently trading at around $41 per barrel.
Oil prices tumbled in March when Saudi Arabia kicked off a price-war with Russia, and fell further due to lower demand during the pandemic.Read more: Real-estate investor Joe Fairless breaks down how he went from 4 single-family rentals to overseeing 7,000 units worth $900 million — and outlines the epiphany that turbocharged his careerAdvertisement
Prices have recovered since OPEC production cuts have taken place, but both benchmarks are still well below their historical levels.
- Film industry wishes speedy recovery for Big B, son Abhishek after they test COVID-19 positive
- 535 new COVID-19 cases in Assam
- Expand plasma therapy facilities for COVID-19 patients: CM
- West Bengal records biggest single-day jump of 1,344 COVID-19 cases
- Amitabh Bachchan and son Abhishek test positive for COVID-19, hospitalised