Page 11 - Gi August 2020

international news

SHELL TO CUT £18BN FROM VALUE OF

ASSETS AMID CORONAVIRUS CRISIS

SHELL HAS WARNED it will slash Brazil and North America.
up to $22 billion (£18 billion) from Shell expects Brent crude prices to
the value of its oil and gas assets as average about $35 a barrel for the rest of
it counts the cost of falling fossil fuel 2020, before rising to $40 next year and
prices during the Covid-19 pandemic, $50 by 2022. The forecasts are sharply SHELL IS WIPING BILLIONS FROM
reports The Guardian. below the oil prices expected by Shell THE VALUE OF ITS GAS ASSETS
The Anglo-Dutch oil major expects only a few months ago, which averaged
the collapse in oil demand during the about $60 a barrel for each year to 2022. gas market following its $53 billion
coronavirus crisis to drag on global oil Shell’s decision to cut the value of its acquisition of BG Group.
prices for at least three years, wiping global portfolio comes just weeks after The value of its integrated gas
billions from the value of its fossil fuel rival BP announced it would reduce the business, the bulk of which is based
reserves and casting doubt on whether value of its own assets by $17.5 billion, in Australia, will take a financial hit of
new discoveries will be developed. its largest writedown in a decade, after between $8 billion to $9 billion. Its oil
In a market update, the oil company cutting its own 30-year energy price refinery assets are likely to face a charge
said it had cut its oil price forecasts and forecasts by a third. of between $3 billion to $7 billion while
would probably need to take a post-tax Shell expects its gas business to take the value of its “upstream” exploration
impairment charge of between $15 the heaviest financial toll, less than four and production assets fall by $4 billion
billion and $22 billion on its global years after becoming one of the world’s to $6 billion, largely due to its Brazilian
oil and gas assets spanning Australia, largest players in the liquefied natural and North American shale business.

NORD STREAM: EU STANDS UP TO WASHINGTON Western Europe,” he said.
“Nothing will stop” Nord Stream 2,
Russia has said of the new US pipeline
IN THE FACE OF expanded US sanctions said at the end of June. sanctions, which are seeing the EU side
against companies and countries By damaging the European Union’s with Russia against its transatlantic ally.
participating in the development of economic interests, US sanctions would “Our view remains the same:
Nord Stream 2, the EU is preparing its weaken the two parties’ show of unity nothing will stop the finalisation
own measures to protect the European against Russia’s actions to destabilise of Nord Stream 2. And we leave to
Union as the United States tightens its Ukraine, after Moscow annexed the Germany and other EU member
sanctions law, reports Reuters. Black Sea peninsula of Crimea from states to pass judgement on such US
“The EU’s position on US sanctions Kiev in 2014, Borrell said further. measures,” Russia’s Ambassador to the
against European companies that Timm Kehler, head of gas lobby EU, Vladimir Chizhov, told EUobserver.
carry out legitimate and lawful Zukunft Erdgas, in a statement said The Russian-owned firm building
activities under European law is such a precedent of “extra-territorial the pipe from Russia to Germany,
unequivocal. They are unacceptable sanctions” must be avoided, a notion the Nord Stream 2 consortium in
and contrary to international law, that all of Europe can unite around. Switzerland, was equally bullish.
and the Union firmly opposes “The adoption of such a tightened “Our shareholder and the five
them,” Joseph Borrell, the High and retroactive sanctions law would be financial investors are fully committed
Representative of the Union for an unacceptable encroachment on the to the project, as are Nord Stream 2’s
Foreign Affairs and Security Policy, EU sovereignty and energy security of suppliers,” it said. NS2

THE NORD STREAM 2 PIPELINE HAS
HEIGHTENED DIPLOMATIC TENSIONS

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News.indd 6 16/07/2020 15:42