The Italy-based multinational oil company, Eni, has just announced their revised 2023 long-term price assumption for Brent from a previous $70/barrel to $60/barrel and gas prices on the Italian hub from $7.8/million British thermal units to $5.5/million British thermal units. Eni CEO Claudio Descalzi said the slashing down of the long-term assumption in four months after the outbreak of pandemic reflected current expectations of future prices along with incorporating it into the capital allocation process.
The slashing moves follow its rivals such as Shell and BP as dwindling demand induced by pandemic crisis and lower-carbon energy switching provoking oil companies to recalculate of their asset values and reserves. The post-tax impairment charges against non-current assets, including a tax devaluations credit recorded in connection with tax-losses carryforwards of an approximately 20% plus/minus of 3.5 billion euros. The company also would book the writedowns in its Q2 results, most of them on upstream assets.
Eni forecasted Brent crude oil for 2020-2022 period at $40, $48 and $55, from the previous projections of $45, $55 and $70/ barrel.
Earlier in 2020 the company pledged to reduce thor gas emissions by 80%, launching one of the most aggressive clean-up in the industry, out from investors pressure to becoming more green. CEO Descalzi confirmed the group have a plan to become a leader in the decarbonization process, undeterred by the impacts of the global pandemic to the economy and the group, and in process of assessing to speed up the plans.
