Repsol's long-term oil price outlook aligns with rivals

[July 23, 2020] LONDON (Reuters) - Spanish energy major Repsol <REP.MC> lowered its oil price <LCOc1> 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.

 A view shows the headquarters of Spanish oil major Repsol in Madrid, Spain, February 25, 2016. REUTERS/Juan Medina/File Photo

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 <EQNR.OL> forecasts oil prices to jump to around $80 a barrel in 2030, in 2019 prices.

This month, Eni <ENI.MI> 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 <RDSa.L> $22 billion writedown last week and BP's <BP.L> $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://fingfx.thomsonreuters.com/
gfx/ce/yzdvxrjzjvx/Majors'%20oil%20price%20assumptions.png

(Reporting by Shadia Nasralla; Editing by Mark Potter)

[© 2020 Thomson Reuters. All rights reserved.]

Copyright 2020 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.