Norway’s Equinor EQNR.OL wrote off $2.93 billion from the value of its assets after cutting its long-term oil price forecast on Thursday, betting the pandemic and a shift away from fossil fuels will have a lasting impact on markets.
Including the asset write-off, Equinor posted a net loss of $2.12 billion in the third quarter.
The energy major’s adjusted profit before interest and tax (EBIT) fell to $780 million in July-September from $2.59 billion in the same period of 2019, lagging the $1.03 billion predicted in a poll of 24 analysts compiled by Equinor.
“Weak prices impact our financial results as regions across the world are still severely affected by the pandemic,” outgoing Chief Executive Eldar Saetre said in a statement.
The write-off follows similar decisions by BP BP.L, Royal Dutch Shell RDSa.L, and other oil firms that have wiped tens of billions of dollars off their book values this year.
Equinor said it expected the price of the Brent global crude benchmark to average $64 a barrel from 2021 to 2050, higher than the $55 predicted by BP in June and also above Shell’s long-term price forecast of $60 from 2023.
Equinor said its expectation for Brent would be set to $65 a barrel for 2025, down from $78 earlier. It will rise towards 2030, the company predicted, but will then decline to $64 by 2040, down from an earlier forecast of $82.
“Significant uncertainty remains around the future commodity price development underlining the importance of increased competitiveness and financial resilience,” said Saetre, who said in August he would retire at the end of October.
Separately, the company also announced two oil discoveries off Canada’s coast, although it was too early to provide estimates for the size of potential reserves.
Equinor holds 60% stakes in the discoveries, while BP Canada owns the remaining 40%.