By Pietro Lombardi

 

Eni SpA expects to report impairments of around 3.5 billion euros ($3.96 billion) due to a lower outlook for energy prices.

The Italian oil-and-gas major is cutting its forecasts for oil and gas prices, both in the short and long term. It is now assuming a long-term price for Brent of $60 a barrel, down from a previous forecast of $70, it said late Monday.

The company is still working on its assessment of the impairments and said the estimate might vary by around 20%, up or down.

Eni expects write-downs of about EUR2 billion related to its upstream assets and around EUR800 million in its refining operations. The estimate also includes devaluation of tax credits of around EUR700 million.

The impairments will be reported in the second-quarter results.

"Our changed long-term assumptions, reached four months after the outbreak of the Covid-19 pandemic, reflect our current expectations about future prices and will be incorporated in our processes of capital allocation," Chief Executive Claudio Descalzi said.

 

Write to Pietro Lombardi at pietro.lombardi@dowjones.com; @pietrolombard10

 

(END) Dow Jones Newswires

July 07, 2020 02:12 ET (06:12 GMT)

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