Chevron to impair part of U.S. upstream assets, sees up to $4B in charges

On January 2, Chevron Corporation announced that for fourth quarter 2023, “the Company will be impairing a portion of its U.S. upstream assets, primarily in California, due to continuing regulatory challenges in the state that have resulted in lower anticipated future investment levels in its business plans. The Company expects to continue operating the impacted assets for many years to come. In addition, the Company will be recognizing a loss related to abandonment and decommissioning obligations from previously sold oil and gas production assets in the U.S. Gulf of Mexico, as companies that purchased these assets have filed for protection under Chapter 11 of the U.S. Bankruptcy Code, and we believe it is now probable and estimable that a portion of these obligations will revert to the Company. We expect to undertake the decommissioning activities on these assets over the next decade.The Company is in the process of finalizing the financial impacts of these actions, which it expects to treat as special items and exclude from adjusted earnings. These actions in the aggregate are currently estimated to result in non-cash, after-tax charges of $3.5B to $4B in the Company’s fourth quarter 2023 results,” said the company in a regulatory filing.