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Liam Denning

Chevron Ushers in Oil’s Era of the Sober-Major

Its multi-billion-dollar writedown signals supermajor spending is over.

Setting its sights a little lower.

Setting its sights a little lower.

Photographer: Justin Sullivan/Getty Images North America

Along with never invading Russia or getting into a Twitter argument, we can add another golden rule — this one specifically for U.S. oil majors: Never buy a shale-gas business.

Chevron Corp.’s $10-11 billion impairment, announced late Tuesday, relates mostly to the Appalachian gas assets it picked up in 2011’s $4.9 billion acquisition of Atlas Energy Inc. Back then, the Permian basin was not a regular topic on the business channels, nor was it a central pillar of Chevron’s spending plans. But now it is, and simultaneously plowing billions into a Permian oil business that spits out gas essentially for free while running a dry-gas business in the Marcellus shale is like flooring it with the parking brake on.