Any reduction in demand for oil has consequences for BP... The energy giant is taking a $17.5b write-off. Image Credit: Reuters

London: BP will incur an up to $17.5 billion writedown in the value of its assets after lowering its long-term oil and gas price outlook in expectation of an accelerated transition away from fossil fuels.

In a statement, BP said that the aftermath of the new coronavirus pandemic will accelerate the pace of transition to a lower-carbon economy. BP revised its assumptions for benchmark Brent crude oil prices to an average of about $55 a barrel between 2021 and 2050.

"The revised prices are around 30 per cent lower than previous assumptions," a company spokesman said.

As a result, BP will take non-cash impairment charges and write-offs in the second quarter in a range of $13 billion to $17.5 billion after tax, the company said.