Chevron Corp. announced Dec. 10 it expects to take a noncash, after-tax impairment charge of $10 billion to $11 billion in the fourth quarter, with more than half of that figure related to Appalachia shale assets.

The California-based supermajor plans to cut funding for various natural gas-related investments, including Appalachian shale assets and the Kitimat LNG project in Canada, as it evaluates its strategic alternatives for these assets, including possibly selling them.

Noting that it expects weaker commodity prices for the long term, Chevron said it is also taking an impairment charge related to its Big Foot offshore oil project in the Gulf of Mexico.

The company on Dec. 10 unveiled a $20-billion capital spending and exploration budget for 2020, spanning upstream and downstream investments, including projects in the Permian Basin, the Gulf of Mexico and Kazakhstan.

"This will be the third consecutive year with organic capital spending held flat at $20 billion, continuing our capital discipline through the cycle. Our emphasis on short-cycle investments is expected to deliver improved returns on capital and stronger free cash flow over the long-term," Chevron Chairman and CEO Michael Wirth said.

The company said it will need approximately $11 billion to sustain and grow currently producing upstream assets. This includes about $1 billion for international unconventional development and $4 billion for Permian development.

Chevron said previously that it intends to ramp output further into the next decade, with a focus on building out shale operations in the Permian Basin. Chevron hopes to boost its Permian production to 600,000 barrels of oil equivalent per day by 2020 and to 900,000 boe/d by the end of 2023.

Approximately $5 billion of the upstream program is planned for major capital projects underway. Global exploration funding is expected to be about $1 billion. Additionally, Chevron is earmarking roughly $2.8 billion for its downstream business.