Repsol's Long-term Oil Price Forecast Aligns with Rivals

Shadia Nasralla
Friday, July 24, 2020

Spanish energy major Repsol lowered its oil price assumptions on Thursday, bringing its long-term outlook in line with most European rivals which have booked writedowns and leaving Equinor as a bullish outlier in the sector.

Repsol took a writedown of $1.5 billion in second-quarter results, after it had already booked 5.7 billion euros ($6.61 billion) in upstream asset impairments last year.

It had previously assumed oil prices might reach $87 a barrel in 2035, adjusting for inflation, but has now revised its headline figure to an average of $59.6 a barrel until 2050 in this year's prices.

Equinor forecasts oil prices to jump to around $80 a barrel in 2030, in 2019 prices.

This month, Eni announced a 3.5 billion euro impairment on the value of its assets after revising down its long-term oil price outlook.

That came on the back of Royal Dutch Shell's $22 billion writedown last week and BP's $17.5 billion hit in June.

While break-even prices for new development projects typically lie below future oil price assumptions, these writedowns have raised questions about the risk of stranded assets - or resources that are left underground because they are uneconomical to tap - in the oil and gas sector.

Here is a graphic showing the varying oil price assumptions among European energy majors: https://tmsnrt.rs/39sXnQz


($1 = 0.8852 euros)

(Reporting by Shadia Nasralla; Editing by Mark Potter)

Categories: Energy Industry News Activity Oil Price

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