ExxonMobil flags potential upstream asset write down of $2.6 billion

ExxonMobil Corp. indicated it could record impairment charges of $2.4-2.6 billion for fourth-quarter 2023 related to its upstream division, tied mostly to the value of California assets.

The company detailed the possible write down in a Securities and Exchange Commission filing Jan. 4.

The impairments “primarily reflect idle Upstream Santa Ynez Unit assets and associated facilities in California,” the operator said.

ExxonMobil said it is “progressing efforts to enable a restart of production” of the assets in the Santa Barbara Channel, but “continuing challenges in the state regulatory environment have impeded progress in restoring operations.” Production has been idled since a pipeline spill in 2015.

ExxonMobil and Mobil Pacific Pipeline Co. previously entered a deal to divest Santa Ynez oil field, including three oil and gas platforms, a pipeline, and oil and gas processing infrastructure, to Sable Offshore for $625 million.

ExxonMobil is expected to release its fourth-quarter 2023 financial report Feb. 2.