Shell Is Taking Up to a $22 Billion Asset Writedown
Energy giant Royal Dutch Shell (NYSE: RDS.A) (NYSE: RDS.B) has revised its outlook for energy prices and refining margin, leading it to predict an asset writedown of between $15 billion and $22 billion for the second quarter. The company cited the effects of the COVID-19 pandemic and the macroeconomic supply-and-demand picture.
A similar outlook revision by BP (NYSE: BP) earlier this month led it to announce impairment charges and exploration write-offs of up to $17.5 billion for its second quarter. These announcements likely mean that a large amount of oil and gas will not be drilled, according to Luke Parker, vice president for corporate analysis at consulting firm Wood Mackenzie. Parker told The Wall Street Journal "within this writedown, Shell is giving us a message about stranded assets, just like BP did a few weeks ago."
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Source Fool.com
