Chevron expects to write-down asset values this quarter
Published by Will Owen,
Reuters is reporting that Chevron Corp. expects to write down the value of its assets by US$10 billion to US$11 billion this quarter, and is considering the sale of some of its natural gas projects.
Two of the assets that are expected to have their value written down include: a deepwater Gulf of Mexico project, which requires an improvement in oil prices in order to turn a profit; and a shale gas project in Appalachia, which has taken a hit from low natural gas prices.
The project stakes being considered for sale by the company include the aforementioned Appalachian shale gas project, as well as the proposed Kitimat LNG project in Canada.
According to Reuters, Chevron’s Chief Executive Michael Wirth made the following comments in a recent statement: “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.”
In summary, the company’s plans are reportedly to hold its 2020 spending program flat at US$20 billion, in preparation for long term low commodity prices. The project stake sales are being considered for the same reasons – expectations of the need to streamline operations and cut costs ahead of a difficult period ahead.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/11122019/chevron-expects-to-write-down-asset-values-this-quarter/
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