The COVID-19 pandemic and subsequent lockdown has affected a huge number of industries, with oil taking a particularly big hit as no bugger is going anywhere.
Prices slumped to an unprecedented low back in April, with buyers being paid to take delivery at one point. Things are recovering, but slowly, with the price per barrel currently sitting at $37; at the start of the year that number was $66. As a result, BP has forecast 30 per cent lower oil prices that it expects to hold until 2050, with Brent crude averaging at $50 per barrel, and is preparing to reduce the value of its assets by between $13bn (£10.4bn) and $17.5bn (£13.9bn).
The oil giant has already axed 10,000 jobs, telling staff that 15 per cent of them would be out before the end of the year. In an email to staff, chief executive Bernard Looney, said:
“The oil price has plunged well below the level we need to turn a profit. We are spending much, much more than we make – I am talking millions of dollars, every day.
“It was always part of the plan to make BP a leaner, faster-moving and lower carbon company. Then the COVID-19 pandemic took hold. You are already aware that, beyond the clear human tragedy, there has been widespread economic fallout, along with consequences for our industry and our company.”
The pandemic combined climate change measures could see oil companies with oil fields that they’re unable to develop, if legislation heads that way. BP has already laid out its net-zero ambition which it hopes to achieve by 2050, and current events have served to usher this along. [BBC News]