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British oil giant BP has said that the company is set to make a series of non-cash write downs and charges of up to $17.5bn (£14bn), reflecting challenges brought by the Covid-19 crisis.

The company said that the revised asset value and price review conclusions were based on the prognosis that Covid-19 would boost “the pace of transition to a lower carbon economy and energy system”.

For this reason, BP has decreased price forecasts by about 30%, and expects Brent crude to average $55 a barrel from now until 2050.

BP said: “As part of its long-term strategic planning, and in the context of its continuing focus on capital discipline, BP is also reviewing its intent to develop some of its exploration intangible assets.

“These actions will lead to non-cash impairment charges and write-offs in the second quarter, estimated to be in an aggregate range of $13bn to $17.5bn post-tax.”

The operator revealed plans in February to become a net zero company by 2050 and prioritise climate change; it has so far  lost about a third of its market value  in 2020 however, due to lack of investment and damage to demand and the world economy. Shares fell by a further 5% in early trading on the FTSE 100 on Monday.

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By GlobalData