Stung by the continued slump in natural gas prices, Chevron Corp. plans to cut back spending in Appalachia and a long-delayed gas export project proposed for the west coast of Canada, the supermajor said.
Chevron said it was evaluating “strategic alternatives” for its Appalachian shale exploration and development plans, as well as for KM LNG, the proposed liquefied natural gas (LNG) project planned for Kitimat in British Columbia (BC). Also under scrutiny are “other” international projects.
In addition, a revised oil price outlook has resulted in an impairment for Chevron’s massive Big Foot oil and gas development in the deepwater Gulf of Mexico (GOM).
Combined, the actions are expected to result in a one-time impairment of $10-11 billion for the fourth quarter, with more than half related to Appalachia shale.
“We believe the best use of our capital is investing in our most advantaged assets,” 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.”
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