Chevron Corp. plans to record $3.5-4.0 billion in impairments for fourth-quarter 2023 associated with a portion of its US upstream assets.
The Jan. 2 filing to the Securities and Exchange Commission pointed to assets “primarily in California, due to continuing regulatory challenges in the state that have resulted in lower anticipated future investment levels in [Chevron’s] business plans.”
In addition to the California asset impairment, the energy company said it will realize a loss related to abandonment and decommissioning obligations from previously sold oil and gas production assets in the US Gulf of Mexico. Chevron said that certain companies that purchased the assets “have filed for protection under Chapter 11 of the US Bankruptcy Code, and [Chevron] believe[s] it is now probable and estimable that a portion of these obligations will revert to the company.”
Chevron expects to continue to operate the impacted California assets “for many years to come,” while decommissioning activities on the Gulf of Mexico assets will be undertaken over the next decade.