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BP to lose $17.5 billion worth of assets

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Miguel A. Rodriguez
Miguel A. Rodriguez
14 September 2020
The pandemics' effects are harsh for BP.

The pandemic's effects are still felt even after the lockdown measures started to ease, and the travel restrictions are beginning to more and more relaxed. One of the biggest Oil companies in the world, BP, is amongst companies that, besides the pandemic, was also hit by the negative prices that Oil reached a while ago.

Today, the company released a statement in which it is writing down the value of its assets by $17.5 billion. It represents 6% of the overall value. The move has been said to come as the company shifts away from fossil fuels. Also, the world needs now less fuel, and in the long run, it predicts a cut of 27% for Brent Oil in the next thirty years.

The company will start effectively to write down the value of the assets at the next earnings report on August 4. Moreover, once it starts to invest in cleaner energy, it will stop developing a particular type of Oil and investing in gas fields. But, the company already said it would reduce the emissions by zero until 2050.

Besides the $17.5 billion got from the write-down, the company will cut 10,000 jobs or approximately 15% of its workforce to reduce costs.

The IEA report from last month showed that the Oil demand could reach the 2012 levels by dropping at an average of 9 million barrels per day. Some experts believe that the market could never again reach the 2019 levels because increase in demand for clean energy.

BP is not the only company that had to take measures to combat the effects of the pandemic. Shell, one of its competitors, cut the payment of the dividends to the shareholders.

BP stock price fell almost 5% during today’s trading session.

Sources: edition.cnn, marketwatch.com


This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.