July 23, 2020 / 11:56 AM / 22 days ago

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

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

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.

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: here

Reporting by Shadia Nasralla; Editing by Mark Potter

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