BP today became the first global oil giant to accept hydrocarbon reserves must remain unexploited, if the firm is to survive. It’s also preparing for an £80/tonne carbon price by 2030.
A write-off of up to $10 billion (£8bn) in untapped assets will likely be announced in BP’s Q2 2020 results in August, CEO Bernard Looney told shareholders.
Including other related impairment charges, the company could write off up to $17.5bn (£14bn) in the second quarter. Calculations continue, and more write-offs may follow, Looney indicated. Second quarter results are due 4 August.
£80/t carbon price by 2030?
In February BP pledged to achieve carbon-neutrality by 2050. Today the behemoth acknowledges the coronavirus pandemic will depress oil and gas prices longer than it expected, making that goal harder to reach.
Its new long term price assumptions include $55 (£44) per barrel for Brent crude averaged to 2030, and a carbon price of $100 (£80) per tonne.
Looney claimed the revisions put BP on track with Paris sustainability goals. “We have reset our price outlook to reflect the likelihood of greater efforts to ‘build back better’ towards a Paris-consistent world’.
Last week BP announced 10,000 job losses among its 70,000 staff worldwide.
“These difficult decisions are rooted in our net zero ambition and reaffirmed by the pandemic,” Looney stated. “They will better enable us to compete through the energy transition”.
See BP’s investor statement here.