A Chevron gas station in Richmond, California, US, on Wednesday, June 19, 2024.
David Paul Morris | Bloomberg | Getty Images
U.S. oil producer Chevron on Thursday said it will take up to $1.5 billion in fourth-quarter charges for restructuring, asset impairments and property sales costs.
Much of the charges are for job cuts and relocations planned for the next two years, the company said in a statement. Chevron did not disclose how many jobs would be lost among its 45,000 workers.
The cost cutting and asset sales come amid a year-long profit slide that required borrowing to cover shareholder payouts. The No. 2 U.S. oil producer earlier said it aimed to cut up to $3 billion in costs through 2026.
Oil companies have turned to acquisitions to lift reserves and output, requiring less expenditures on new fields. Chevron will cut 2025 project spending by $2 billion from about $19 billion this year, after offering $53 billion to buy rival Hess.
“The 2025 capital budget along with our announced structural cost reductions demonstrate our commitment to cost and capital discipline,” CEO Michael Wirth said in a statement.
The lower project spending also reflects the end of big outlays at its Kazakhstan operations, recent sales of Canadian, Alaskan and Congolese oil and gas operations, and lower spending on U.S. shale operations.
New expenditures on oil and gas output will fall about $1 billion, while refining will fall about $300 million compared to this year.
The budget excludes any costs for Chevron’s proposed deal for Hess that has been stalled by challenges from Exxon Mobil and CNOOC, Hess’ partners in a Guyana oil venture.
Severance pay and relocations will account for up to $900 million of the after-tax charges, and asset impairments and sales of properties will add up to $600 million, the company said.
Chevron said the asset impairments would not affect adjusted earnings. Financial firm LSEG projects Chevron’s fourth-quarter profit at $4.35 billion, or $2.42 per share, from $6.45 billion, or $3.45 per share, in the year-ago quarter.
Charges have become a nearly annual exercise. Chevron took a $3.7 billion impairment charge a year ago, $1.1 billion in 2022 and $4.8 billion in 2020.
