The world's largest chemical producer is expecting its balance sheet to crumble on low oil prices

The world's largest chemical company BASF warned investors that it expects to book a €600 million impairment charge because of cripplingly low oil prices.

The German chemical giant said in its preliminary 2015 statement that "prices for oil and gas will remain at a low level in 2016. The assumptions for oil and gas prices have also been reduced for subsequent years."

"This results in impairments of around €600 million in the Oil & Gas segment. This amount, which does not affect cash flow, is reported as a special item and reduces EBIT in the Oil & Gas segment in the fourth quarter of 2015," it added.

BASF said in the statement that sales also fell by 5% to €70.4 billion. But investors will not know the full extent of the pain until BASF publishes its full year results on February 26.

BASF is the latest in a long line of companies that have taken a hit over falling oil and commodities prices. Oil prices are down from the triple digit figures from June 2014 and are now hovering around $30 per barrel - down 70%.

It is hurting any company that uses oil within its supply chain including BASF. Its shares are down over 18% during the past year.