* Exxon writes down up to $20 bln off assets
* Short and long-term outlook weigh on oil prices
* GRAPHIC: Oil majors' impairments https://tmsnrt.rs/3fUjFOj
By Ron Bousso
LONDON, Dec 1 (Reuters) - The world's top energy companies
have slashed the value of their oil and gas assets by around $80
billion in recent months after revising lower the long-term
outlook for fuel prices in the wake of the coronavirus epidemic
and the energy transition.
Exxon Mobil, the largest U.S. oil company, announced
on Monday it would write down the value of natural gas
properties by $17 billion to $20 billion, its biggest ever
impairment following the sharp drop in energy prices this
year.
It follows similar steps by rivals including Royal Dutch
Shell, BP and Chevron since late 2019.
The so-called oil majors are "acknowledging overly
optimistic commodity price views of yesteryear," said Bernstein
analyst Oswald Clint.
Most of Exxon's impairments focused on legacy assets from
its $30 billion acquisition of U.S. shale producer XTO Energy in
2010, a deal former CEO Rex Tillerson had previously said was
"ill-timed."
Following the impairments, companies will focus on the parts
of the business that are able to withstand the lowest oil and
gas prices, Clint said.
"Balance sheets now reflect the lowest portfolio break-evens
in two decades and therefore the most resilient to future
commodity price shocks."
Exxon did not disclose its new commodity price outlook. The
value of the oil majors plummeted in 2020 after energy demand
collapsed due to the pandemic.
The shares of Exxon, Shell and BP have lost over 45% so far
this year, more than benchmark Brent oil prices that have lost
around 27% and stand today near $48 a barrel.
The impairments made by the European majors also came after
they lowered their long-term oil prices forecasts as they
prepare to increasingly switch to renewable energy in the coming
decades to reduce carbon emissions to net zero.
The revisions might nevertheless lead to a sharp rise in oil
prices in the coming years as a result of lower investments in
new projects, Clint said.
"We're staring into the abyss when it comes to supply and
demand balances due to a dearth of much needed capital
investment."
(Reporting by Ron Bousso
Editing by Chizu Nomiyama)
