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- Oil giant cites California’s regulatory environment for charge
- Chevron also writing down value of some Golden State assets
By Kevin Crowley
Exxon Mobil Corp. warned investors of a $2.5 billion write down of the value of some California operations.
The impairment to be recorded in fourth-quarter earnings is “primarily” related to its Santa Ynez operations off the coast of Santa Barbara, Exxon said in a filing Thursday. The announcement comes days after Chevron Corp. said it will incur a large writedown due largely to California energy policies.
Exxon temporarily suspended production at its Santa Ynez oil field after a 2015 pipeline leak before resuming crude shipments via trucks. Regulators later stepped in and restricted Exxon’s ability to move oil by road, citing risks to other drivers and the environment.
“While the Corporation is progressing efforts to enable a restart of production, continuing challenges in the state regulatory environment have impeded progress in restoring operations,” Exxon said in the filing.
Excluding the writedown, Exxon said fourth-quarter earnings were similar to the previous three-month period. Lower oil prices inflicted a $600 million hit on earnings but that was at least partially offset by a rise in natural gas markets. Meanwhile, a $1.6 billion drop in refining earnings was partly mitigated by a gain in unsettled derivatives of about $1.2 billion.
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