Shell takes $22 billion write-down, expects lower oil & natgas prices

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Shell takes $22 billion write-down, expects lower oil & natgas prices

On Tuesday, Royal Dutch Shell Plc., the Hague, Netherlands-based Anglo-Dutch oil and gas supermajor and the third-largest company across the globe, had issued a statement saying that the British-Dutch oil supermajor had been brewing off a plan to trim the value of its gas and oil assets by as much as $22 billion as the pandemic-led demand crisis had deepened wounds further into an already flooded global crude oil market and had plummeted the crude oil futures’ to the multi-year lows.

In point of fact, the write-down announcement from the Anglo-Dutch oil supermajor came forth shortly after the world’s third-largest company by asset had slashed its forecast for energy prices until 2023 adding that the sales would only improve following a complete recovery from the pandemic-led economic slump that might take even years, suggesting a simmering outlook in demands of the Hague-based company’s fossil-fuels.

More importantly, after a price war over market shares between Saudi and Russia had drowned the crude oil futures’ prices in mid-March following a temporary spin-off of the OPEC+ pact, a number of oil supermajors had been forced to follow the staggering path that the Anglo-Dutch company had announced on Tuesday, while another oil supermajor BP Plc., based on London, said earlier this month that the company was planning to slash the value of its assets by up to $17.5 billion in order to absorb the hits stemmed from the pandemic-led demand crunch.

Royal Dutch Shell to take a post-tax charge between $15-$22 billion

On top of that, according to the Tuesday statement of the Anglo-Dutch oil supermajor which has assets worth of $126.5 billion to date, the Hague-based oil and natgas company would take a post-tax charge of $15 to $22 billion due to the write downs, while the company had also added that the charges were related to its large-scale LNG operations in Australia, the world’s biggest liquified natgas facility, alongside some of its oil and gas assets in Brazil and US shale basins.