Chevron said Jan. 2 that the company anticipates writing down $3.5 billion to $4 billion of value in non-cash, after-tax charges in its fourth-quarter results.

“The Company will be impairing a portion of its U.S. upstream assets, primarily in California, due to continuing regulatory challenges in the state that have resulted in lower anticipated future investment levels in its business plans,” the company wrote in a regulatory filing, while noting that it would continue to operate the facilities “for years to come.”

Chevron, based in San Francisco, will take non-cash impairments on its U.S. oil and gas production for expected losses, according to a Securities and Exchange Commission filing.

Chevron also stated that obligations for several abandoned and decommissioned wells and pipelines in the Gulf of Mexico purchased by other companies will probably revert to Chevron because the buyers filed for bankruptcy in 2023. 

The company did not break down expected losses between the Gulf and California.

Chevron stated it expects to treat the losses as special items and exclude them from adjusted earnings.

In December, Chevron said that it had cut “hundreds of millions” in California investments, stating in a filing with the state’s Energy Commission that “adversarial” government policies were making business difficult.

“California’s policies have made it a difficult place to invest, so we have rejected capital projects in the state,” Andy Walz, president of Chevron’s Americas Products business, wrote in the filing. “Such capital flight reflects the state’s inadequate returns and adversarial business climate.

Walz made the criticism after lawmakers in California considered putting a limit on the amount of profits an in-state refinery could make.