Royal Dutch Shell said today it will write $22 billion off the value of its assets after sharply lowering its oil and gas price outlook in the wake of the coronavirus pandemic. 

The decision also comes as the Anglo-Dutch company reviews its operations after CEO Ben van Beurden laid out plans in April to reduce greenhouse gas emissions to net zero by 2050.

Shell has a market value of $126.5 billion.

It said in an update ahead of its second-quarter results on July 30 that it will take an aggregate post-tax impairment charge in the range of $15 to $22 billion in the quarter. 

The world's largest fuel retailer said it expects a 40% drop in fuel sales in the second quarter from a year earlier to 4 million barrels per day (bpd) due to a sharp fall in consumption due to coronavirus-related travel restrictions. 

Upstream oil and gas production is expected to average 2.35 million bpd in the second quarter, down from 2.71 million bpd in the previous quarter. 

Shell's writedown mirrors rival BP's move to take up to $17.5 billion off the value of its assets as it prepares to shift to low-carbon energy. 

Shell reduced its expected average benchmark Brent crude oil price for 2020 to $35 a barrel, down from $60. For 2021 and 2022 it cut its forecast to $40 and $50 a barrel, respectively, also down from $60. 

Its long-term oil price outlook now stands at $60 a barrel, Shell said in an update ahead of its second-quarter results on July 30. It previously did not disclose its long-term value. 

The company also cut its long-term refining profit margin outlook by 30%. 

Its long-term natural gas price was set at $3 per million British Thermal Units.

BP cut its long-term Brent forecast to $55 a barrel from a previous $70.