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European Oil Giant Slashes Oil Price Forecast To $48 Per Barrel In 2021

Italy’s Eni lowered its long-term oil price assumptions on Tuesday, saying that the coronavirus pandemic would have “an enduring impact” on the global economy and energy industry.

 

Weeks after BP and Shell revised down their long-term price assumptions, Eni also cut its 2020-2024 and long-term oil and gas pricing scenario, warning of $4 billion (3.5 billion euro) in post-tax impairment charges against non-current assets for the second quarter, plus/minus 20 percent.  

 

Eni now forecasts Brent Crude prices at $60 a barrel in 2023 compared to its previous assumption of $70 a barrel. For the years 2020-2022, Brent prices are expected to be at $40, $48, and $55 per barrel, respectively, compared to the previous assumptions of $45, $55, and $70 a barrel.

 

While reducing its oil price assumptions, the Italian company reiterated today its February commitment to reduce its carbon footprint and possibly even speed up its efforts to be more prepared in the energy transition.

 

“We confirm our strategy to become a leader in the decarbonization process, notwithstanding the enduring impacts of the COVID-19 pandemic on the global economy and the Company. We are assessing how to speed up our plans,” Eni’s CEO Claudio Descalzi said.  

 

“This ongoing evolution will allow the Company to achieve a better balanced portfolio, reducing the exposure to the volatility of hydrocarbon prices, while progressing towards our targets of sustainability and profitability. Our changed long-term assumptions, reached four months after the outbreak of the COVID-19 pandemic, reflect our current expectations about future prices and will be incorporated in our processes of capital allocation,” Descalzi noted.

 

Last month, BP warned of post-tax impairments and write-offs in the range of $13 billion to $17.5 billion, expecting the long-term average price for Brent Crude to be $55 per barrel between 2021 and 2050.

 

Shell warned last week that it could take as much as $22 billion in post-tax impairment charge for Q2, warning of a massive write-down of its assets as it revised its price assumptions after the oil price crash.    


By Tsvetana Paraskova for Oilprice.com


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