Oil giant Shell has warned that the value of its assets will be slashed by up to 22 billion US dollars (£17.9 billion) as the impact of the virus weighed on sentiment.
It predicted the write-down for the current quarter after lowering its outlook on oil and gas prices, which also comes amid a climate-focused review of its operation, after it laid out plans reduce greenhouse gas emissions to net zero by 2050.
The British-Dutch firm predicted that it will book an impairment of between 15 billion dollars (£12.2 billion) and 22 billion dollars (£17.9 billion) after commodity prices were hit by coronavirus and the Saudi-Russian price war.
Earlier this month, BP said it would slash the value of its own assets by up to 17.5 billion dollars (£14.2 billion) as it shared its rival’s downbeat tone on commodity prices.
Shell also told investors that it predicted a 40% slump in fuel sales in the second quarter due to a sharp fall in consumption.
Fuel sales have been hit by travel restrictions in the face of the coronavirus pandemic, which has particularly weighed on air travel.
The company said it continues “to adapt to ensure the business remains resilient” in the face of the challenging environment.
It said on Tuesday that it expected Brent crude oil price to be at 50 dollars a barrel in 2022, having previously predicted a price of 60 dollars per barrel.
However, Shell also said that it expects oil production to be high than previously predicted, saying it hopes to produce between 2.3 million and 2.4 million barrels of oil per day.