From Time Inc.:

Chevron will write down the value of $3.5 billion to $4 billion in assets due to restrictive government policies in California and environmental liabilities in the Gulf of Mexico. The company’s production in California has dropped 15% since the Covid-19 pandemic, and is now just 3% of its worldwide output. Despite the charges, Chevron plans to continue operating the oil fields and related assets for years to come.

As California’s policies turn adversarial toward fossil fuels, Chevron has rejected the state’s climate change allegations and reduced investments in its refineries. The company is a key supplier of jet fuel to San Francisco and Los Angeles airports. Chevron also faces fourth-quarter charges in the Gulf of Mexico related to cleaning up decades-old installations that have reached their end of productive life. The company expects to undertake the decommissioning activities in these assets over the next decade.

Despite the charges, Chevron plans to continue operating the oil fields and related assets for years to come. Additionally, the company is a key supplier of jet fuel to the San Francisco and Los Angeles airports. Chevron also has fourth-quarter charges in the Gulf of Mexico to cover the costs of cleaning up decades-old installations, which have reached the end of their productive life. The company expects to undertake the decommissioning activities over the next decade.

Chevron’s relationship with its home state has turned adversarial as California seeks to phase out fossil fuels. The company is currently in a legal battle with the state after it sued Chevron and other major oil companies for allegedly lying about climate change. Despite this, Chevron is planning to continue operating the oil fields and related assets for years to come.

Despite the significant writedowns, Chevron said it plans to continue operating the oil fields and related assets for years to come, as well as its ongoing efforts to reduce refinery investments. Although the company sold some of its Gulf of Mexico assets, a portion of environmental costs of previously sold operations are expected to revert back to Chevron.



Read more: Chevron blames a $4 billion writedown mostly on California’s regulations as its war with the state’s Democratic-led government heats ups