>>9622760
BP took writedowns for other reasons, not related to muh corona. From Marketwatch:
BP Is Writing Down Oil Projects. Dividends May Be Next.
BY MarketWatch
โ 11:53 AM ET 06/15/2020
BP(BP.LN)'s big asset write-downs (https://www.wsj.com/articles/bp-takes-17-5-billion-write-down-expects-oil-price-to- stay-low-11592211169?mod=hp_lead_pos3) hint at a new seriousness in the company's green ambitions. Investors may be slow to appreciate the strategic shift, however necessary.
On Monday, the British energy producer said it would write down up to $17.5 billion of oil-and-gas assets. Recently installed Chief Executive Bernard Looney said the change was necessary because the Covid-19 crisis (https:// www.wsj.com/articles/what-we-know-about-the-coronavirus-11579716128)will have an "enduring economic impact" and because countries are accelerating efforts to decarbonize.
The move makes a dividend cut in the company's coming second-quarter results much more likely. The impairments won't require cash, but will make BP's already high leverage ratios look worse. Oil companies tend to measure their net debt relative to total capital, so write-downs have a similar effect to an increase in borrowings.
The dividend has been in doubt almost ever since BP's exiting boss raised it (https://www.wsj.com/articles/bps-big- dividends-come-with-costs-11580821970?mod=article_inline)as a parting gift in February. BP reaffirmed its commitment (https://www.wsj.com/articles/bp-is-stuck-in-the-past-11588695560) in the first quartereven as its London-listed peer Royal Dutch Shell (RDSA.LN)cut its payout (https://www.wsj.com/articles/shells-dividend-cut-is-harsh-but-fair- 11588254430) for the first time since World War IIbut relied on asset sales to fund it. Oil companies have faced a double crisis as Covid-19 lockdowns have reduced energy demand amid a global oil glut.
BP's new forecasts assume long-term prices of $55 a barrel for oil, $2.90 a million British thermal units of gas and $ 100 a metric ton for carbon from 2030. The company expects governments to act faster to decarbonize the economy and push up carbon prices. Recent stimulus packages from Berlin, Paris and Brussels all incorporate big clean-energy spending commitments.
Until recently, BP was less focused on green projects than its regional rivals Shell and Total(FP.FR). But Mr. Looney promised in February that BP would be a carbon-neutral business by 2050 or sooner. Monday's write-downs offer some indication that this is more than just hot air, particularly as about half of them relate to prospects that presumably won't be explored.
Green commitments are good for the environment and popular with Europeans, but investors seem less impressed. Shares of Chevron (CVX)and Exxon Mobil(XOM), which are much less focused on decarbonization, trade at a premium to those of their European rivals.