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Chris Hughes

BP Submits to Brutal Reality on the Future of Oil

The company’s $18 billion writedown acknowledges that the major oil producers are sitting on fields that will never be developed.

A post-coronavirus future.

A post-coronavirus future.

Photo: Bloomberg

BP Plc’s potential $18 billion writedown underscores just how significant a turning point 2020 is becoming for the oil industry. It baldly acknowledges that the major hydrocarbon producers are sitting on oil fields that will never be developed — because the pandemic has curbed energy demand and increased the desire for renewables within the supply mix.

The British oil giant has a new chief executive officer and a new finance director and it was already trying to break with the past before the impact of the Covid-19 crisis became fully apparent. The outbreak has prompted a more radical reassessment of BP’s future role and what its assets are worth.