Royal Dutch Shell said that it could cut the value of its oil and gas assets by as much as $22 billion , as it takes a dim view of the state of the oil market. The move adds more evidence to the notion that a huge slice of oil reserves will wind up as stranded assets. Shell cut its Brent oil prices forecast from $60 per barrel to $35 for this year, and lowered its 2021 and 2022 forecasts to $40 and $50 per barrel, respectively, down from $60 previously. The lower outlook reflects the expected damage to the oil market due to the coronavirus and the negative impacts on the global economy, Shell said. As a result, the value of Shell’s assets will be cut by between $15 and $22 billion. Broken down by segment, Shell’s integrated gas unit will take an $8 to $9 billion hit, mostly related to Australian LNG assets, including its gargantuan Prelude project, a floating LNG vessel, which came in over budget and is now underutilized in a weak LNG market. Shell’s upstream unit will be impaired by $4 to $6 billion, a cut related to Brazil and U.S. shale. Finally, its […]

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.