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New project outlays to drop as major investments end

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Fourth-quarter charges reflect job cuts, asset sales,

writedowns

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Budget excludes any costs for proposed Hess deal

By Gary McWilliams

HOUSTON, Dec 5 (Reuters) - U.S. oil producer Chevron ( CVX ) 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 ( CVX )

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 ( CVX )

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 ( CVX ) proposed deal

for Hess that has been stalled by challenges from Exxon Mobil ( XOM )

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 ( CVX ) said the asset impairments would not affect adjusted

earnings. Financial firm LSEG projects Chevron ( CVX ) fourth-quarter

profit of $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 ( CVX ) took a

$3.7 billion impairment charge a year ago, $1.1 billion in 2022

and $4.8 billion in 2020.