Following BP’s announcement that it is revising long term price assumptions as part of its strategy development;

Will Scargill, Managing Oil & Gas Analyst at GlobalData, a leading data and analytics company, offers his view on the company’s latest steps:

“BP’s decision to revise downwards its long-term oil and gas price assumptions is an important step as it looks to remake itself for the energy transition. This will make the internal investment case for oil and gas investments more challenging and advance the case for clean energy investments.

“With its main oil and gas segments making up almost 98% of BP’s capital expenditure in 2019, a major re-balancing of investment decisions will be needed if it is to meet its climate ambitions.

“These lower price assumptions also reflect the major uncertainty in the oil and gas industry around the future of the market after the turmoil wreaked by COVID-19. On top of the effects on oil and gas demand of lockdowns and lower economic growth, there are large questions around whether behavioural change may prevent transportation demand from returning to previous levels after the enforced experiences of working from home and virtual meetings.”