Inside Climate News discusses how BP and Shell Write-Off Billions in Assets, Citing Covid-19 and Climate Change. The moves were seen as a possible turning point as plummeting demand makes big oil companies admit they’re not worth what they used to be.
Two of the world’s largest energy companies have sent their strongest signals yet that the coronavirus pandemic may accelerate a global transition away from oil, and that billions of dollars invested in fossil fuel assets could go to waste.
This week, Royal Dutch Shell said it would slash the value of its oil and gas assets by up to $22 billion amid a crash in oil prices. The announcement came two weeks after a similar declaration by BP, saying it would reduce the value of its assets by up to $17.5 billion. Both companies said the accounting moves were a response not only to the coronavirus-driven recession, but also to global efforts to tackle climate change.
Some analysts say the global oil and gas industry is undergoing a fundamental transformation and is finally being forced to reckon with a future of dwindling demand for its products.