BP cuts oil price forecast by 30% as government fast tracks carbon emission reduction plans

A UK oil company has predicted that it could see the value of its assets drop by up to £13.8bn as plans to cut carbon emissions are fast tracked.

BP, headquartered in London, has cut oil price forecasts by approximately 30 per cent, due to the government speeding up plans to cut carbon emissions following the pandemic.

The company said that it expects Brent crude to average $55 a barrel until 2060, which will affect its value by between $13bn and $17.5bn.

This follows the firm’s announcement last week that it will be cutting 10,000 jobs due to a global drop in oil demand.

Bernard Looney, BP’s chief executive officer, commented: “In February we set out to become a net zero company by 2050 or sooner.

“Since then we have been in action, developing our strategy to become a more diversified, resilient and lower carbon company.

“As part of that process, we have been reviewing our price assumptions over a longer horizon.

“That work has been informed by the COVID-19 pandemic, which increasingly looks as if it will have an enduring economic impact.

“So, we have reset our price outlook to reflect that impact and the likelihood of greater efforts to ‘build back better’ towards a Paris-consistent world.

“We are also reviewing our development plans.

“All that will result in a significant charge in our upcoming results, but I am confident that these difficult decisions - rooted in our net zero ambition and reaffirmed by the pandemic - will better enable us to compete through the energy transition.”

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