Chevron to Book $10-11bn in Q4 Writedowns

US oil major Chevron may write down as much as $11bn from its assets in the fourth quarter – more than half at its Appalachia shale gas operations, it said in a statement on December 11.

The company said it would cut spending on gas-related ventures such as the Appalachia shale, its 50%-owned Kitimat LNG export project in Canada and other international operations, because of a weaker price outlook.

“Chevron is evaluating its strategic alternatives for these assets, including divestment,” it said.

Besides the Appalachia shale, whose prospects have dimmed because of lower gas prices, Chevron said the $10-11bn in charges it expected to book also related to its Big Foot oil project in the Gulf of Mexico.

“We believe the best use of our capital is investing in our most advantaged assets,” Chevron CEO Michael Wirth said. “With capital discipline and a conservative outlook comes the responsibility to make the tough choices necessary to deliver higher cash returns to our shareholders over the long term.”

Chevron also announced it would keep annual capital spending flat in 2020 at $20bn, of which $16.8bn will be injected into its upstream business.