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Photo: Smith Collection/Gado/Getty Images

Chevron announced a $10 billion to $11 billion write-down on several natural gas assets and one of its oil projects in the Gulf of Mexico.

Driving the news: The company said yesterday that the downward revision in its long-term price outlook means that it will "reduce funding to various gas-related opportunities."

  • The decision largely focuses on shale gas holdings in Appalachia, but also the Kitimat LNG project in Canada and other international holdings.
  • The company is exploring options including asset sales.
  • It also said its revised oil price outlook led to the impairment charge on its Big Foot project.

The intrigue: There's a couple ways of looking at this. One is that it's simply a way to be judicious with capital when there's lots of your product in a competitive market when prices are low and you think they'll stay that way.

  • In particular, there's a gas glut in North America that has made the resource very cheap.
  • CEO Mike Wirth said in a statement that "capital discipline and a conservative outlook" require "tough choices" to benefit shareholders.

But, but, but: Another view would be that it says something deeper about the industry in a world slowly transitioning to cleaner sources and, in fits and starts, getting more serious about global warming.

This Wall Street Journal piece gets to the second point. They write (emphasis added)...

  • "The sobering reappraisal by one of the world’s largest and best-performing oil companies is likely to ripple through the oil-and-gas industry, forcing others to publicly reassess the value of their holdings in the face of a global supply glut and growing investor concerns about the long-term future of fossil fuels."

Bloomberg goes there too, noting:

  • "Chevron follows Schlumberger Ltd. and Repsol SA in ascribing a lower value to their assets at a time when the growing adoption of cleaner energy stokes speculation that demand for fossil fuels may peak in a few years, while supplies keep rising."

Go deeper:

Go deeper

Biden explains justification for Syria strike in letter to Congress

Photo: Chris Kleponis/CNP/Bloomberg via Getty Images

President Biden told congressional leadership in a letter Saturday that this week's airstrike against facilities tied to Iranian-backed militia groups in Syria was consistent with the U.S. right to self-defense.

Why it matters: Some Democrats, including Sens. Tim Kaine (D-Va.) and Chris Murphy (D-Conn.) and Rep. Ro Khanna (D-Calif.), have criticized the Biden administration for the strike and demanded a briefing.

2 hours ago - Health

FDA authorizes Johnson & Johnson's one-shot COVID-19 vaccine for emergency use

Photo: Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

The Food and Drug Administration on Saturday issued an emergency use authorization for Johnson & Johnson's one-shot coronavirus vaccine.

Why it matters: The authorization of a third coronavirus vaccine in the U.S. will help speed up the vaccine rollout across the country, especially since the J&J shot only requires one dose as opposed to Moderna and Pfizer-BioNTech's two-shot vaccines.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

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