By Charles Kennedy – Jan 02, 2024, 3:31 PM CST
Chevron flagged on Tuesday that it might perchance well perchance presumably snatch an up to $4 billion impairment within the fourth-quarter results, on account of impairments to U.S. upstream sources in California and the Gulf of Mexico.
The persevering with regulatory challenges in California maintain made Chevron revise down its deliberate investments within the affirm, the U.S. supermajor said in an SEC filing on Tuesday. As nicely as, Chevron will moreover impair a share of previously bought oil and gas manufacturing sources within the U.S. Gulf of Mexico on account of a number of the customers of those sources maintain since filed for Chapter 11 financial peril safety and fragment of the decommissioning responsibilities might perchance well revert to Chevron.
A variety of the impaired sources are in California, “on account of persevering with regulatory challenges within the affirm that maintain resulted in decrease anticipated future investment ranges in its enterprise plans,” Chevron said, adding that it expects to proceed working the impacted sources for decades but to advance support.
Closing month, Chevron said in feedback with the California Vitality Commission that it has within the bargain of its spending within the affirm by “hundreds of thousands and thousands of bucks since 2022,” on account of “adversarial” insurance policies in opposition to fossil fuels.
In the U.S. Gulf of Mexico, Chevron “will be recognizing a loss linked to abandonment and decommissioning responsibilities from previously bought oil and gas manufacturing sources within the U.S. Gulf of Mexico, as firms that purchased these sources maintain filed for safety below Chapter 11 of the U.S. Monetary peril Code, and we relate it is now doable and estimable that a share of those responsibilities will revert to the Company.”
Chevron expects it might perchance well perchance presumably undertake the decommissioning activities on these sources over the subsequent decade.
Chevron expects to address the non-cash, after-tax charges of $3.5 billion to $4.0 billion as special objects and exclude them from adjusted earnings within the fourth-quarter results.
In October, Chevron reported decrease-than-anticipated earnings for the third quarter of 2023, as worldwide downstream weakness and repairs at every the upstream and downstream operations weighed on profits.
By Michael Kern for Oilprice.com
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