Spanish Repsol Reports €5B Write-Offs Of Oil And Gas Assets
Spanish corporation Repsol announced the planned large-scale decommissioning of assets in the fourth quarter of 2019 as part of the approved “new scenario” for reducing harmful emissions.
Repsol’s statement reads that the oil and gas company hopes to be « the first in the world in this sector » to reduce harmful emissions from its operations to zero by 2050.
To achieve its stated goals, Repsol management has developed a “new scenario” of oil and gas prices that will meet the objectives of the Paris Climate Agreement. At the same time, the company will set intermediate goals in 2020 and 2040 to reduce harmful emissions.
Changing the development strategy of the company in accordance with these goals, as noted, « entails an adjustment to the carrying value of certain assets of the group with an effect of about €4.8 billion ($ 5.3 billion). » The write-off of Repsol assets in this volume will be recorded in the financial statements of the company for the IV quarter of 2019, which will be published in February next year.
Repsol also noted that the write-off will mainly affect the upstream gas segment in the US and Canada due to a change in expectations for future gas prices.