| Accounting For Suspended Exploratory Well Costs |
10. Accounting for Suspended Exploratory Well Costs The Corporation continues capitalization of exploratory well costs when the well has found a sufficient quantity of reserves to justify its completion as a producing well and the Corporation is making sufficient progress assessing the reserves and the economic and operating viability of the project. The term “project” as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports. The following two tables provide details of the changes in the balance of suspended exploratory well costs as well as an aging summary of those costs. Change in capitalized suspended exploratory well costs: | | | | 2019 | | 2018 | | 2017 | | | | | (millions of dollars) | | | | | | | | | | Balance beginning at January 1 | | 4,160 | | 3,700 | | 4,477 | | Additions pending the determination of proved reserves | | 532 | | 564 | | 906 | | Charged to expense | | (46) | | (7) | | (1,205) | | Reclassifications to wells, facilities and equipment based on the | | | | | | | | | determination of proved reserves | | (37) | | (48) | | (497) | | Divestments/Other | | 4 | | (49) | | 19 | Ending balance at December 31 | | 4,613 | | 4,160 | | 3,700 | Ending balance attributed to equity companies included above | | 306 | | 306 | | 306 |
Period end capitalized suspended exploratory well costs: | | | | 2019 | | 2018 | | 2017 | | | | | (millions of dollars) | | | | | | | | | | Capitalized for a period of one year or less | | 532 | | 564 | | 906 | | Capitalized for a period of between one and five years | | 2,206 | | 2,028 | | 1,345 | | Capitalized for a period of between five and ten years | | 1,411 | | 1,150 | | 1,064 | | Capitalized for a period of greater than ten years | | 464 | | 418 | | 385 | Capitalized for a period greater than one year - subtotal | | 4,081 | | 3,596 | | 2,794 | | | Total | | 4,613 | | 4,160 | | 3,700 |
Exploration activity often involves drilling multiple wells, over a number of years, to fully evaluate a project. The table below provides a breakdown of the number of projects with only exploratory well costs capitalized for a period of one year or less and those that have had exploratory well costs capitalized for a period greater than one year. | | | | 2019 | | 2018 | | 2017 | Number of projects that only have exploratory well costs capitalized for a period | | | | | | | of one year or less | | 4 | | 6 | | 11 | Number of projects that have exploratory well costs capitalized for a period | | | | | | | greater than one year | | 46 | | 52 | | 46 | | | Total | | 50 | | 58 | | 57 |
Of the 46 projects that have exploratory well costs capitalized for a period greater than one year as of December 31, 2019, 14 projects have drilling in the preceding year or exploratory activity planned in the next two years, while the remaining 32 projects are those with completed exploratory activity progressing toward development.The table below provides additional detail for those 32 projects, which total $3,176 million. | | | Years Wells | | | | Dec. 31, | Drilled / | | | Country/Project | 2019 | Acquired | Comment | | (millions of dollars) | | | Angola | | | | | | | | - AB32 Central NE Hub | 69 | | 2006 | - | 2014 | Evaluating development plan for tieback to existing production facilities. | | - Kaombo Split Hub | 20 | | 2005 | - | 2006 | Evaluating development plan to tie into planned production facilities. | | Phase 2 | | | | | | | | Argentina | | | | | | | | - La Invernada | 72 | | 2014 | Evaluating development plan to tie into planned infrastructure. | | Australia | | | | | | | | - East Pilchard | 7 | | 2001 | Gas field near Kipper/Tuna development, awaiting capacity in existing/ | | | | | | | | planned infrastructure. | | - Gorgon Area Ullage | 315 | | 1994 | - | 2015 | Evaluating development plans to tie into existing LNG facilities. | | - SE Longtom | 10 | | 2010 | Gas field near Tuna development, awaiting capacity in existing/planned | | | | | | | | infrastructure. | | - SE Remora | 32 | | 2010 | Gas field near Marlin development, awaiting capacity in existing/planned | | | | | | | | infrastructure. | | Guyana | | | | | | | | - Payara | 120 | | 2017 | - | 2018 | Continuing development plan discussions with the government. | | Iraq | | | | | | | | - Kurdistan Pirmam | 109 | | 2015 | Evaluating commercialization alternatives, while waiting for government | | | | | | | | approval to enter Gas Holding Period. | | Kazakhstan | | | | | | | | - Kairan | 53 | | 2004 | - | 2007 | Evaluating commercialization and field development alternatives, while | | | | | | | | continuing discussions with the government regarding the development plan. | | Mozambique | | | | | | | | - Rovuma LNG Future | 120 | | 2017 | Evaluating/progressing development plan to tie into planned LNG facilities. | | Non-Straddling Train | | | | | | | | - Rovuma LNG Phase 1 | 150 | | 2017 | Progressing development plan to tie into planned LNG facilities. | | - Rovuma LNG Unitized | 35 | | 2017 | Evaluating/progressing development plan to tie into planned LNG facilities. | | Trains | | | | | | | | Nigeria | | | | | | | | - Bolia | 15 | | 2002 | - | 2006 | Evaluating development plan, while continuing discussions with the | | | | | | | | government regarding regional hub strategy. | | - Bonga North | 34 | | 2004 | - | 2009 | Evaluating/progressing development plan for tieback to existing/planned | | | | | | | | infrastructure. | | - Bosi | 79 | | 2002 | - | 2006 | Development activity under way, while continuing discussions with the | | | | | | | | government regarding development plan. | | - Bosi Central | 16 | | 2006 | Development activity under way, while continuing discussions with the | | | | | | | | government regarding development plan. | | - Erha Northeast | 26 | | 2008 | Evaluating development plan for tieback to existing production facilities. | | - OML 138 Ukot SS | 13 | | 2015 | Evaluating development plan for tieback to existing production facilities. | | - OML 138 Ukot SW | 41 | | 2014 | Evaluating development plan for tieback to existing production facilities. | | - Pegi | 32 | | 2009 | Awaiting capacity in existing/planned infrastructure. | | - Satellite Field | 12 | | 2013 | Evaluating development plan to tie into planned production facilities. | | Development Phase 2 | | | | | | | | - Other (4 projects) | 10 | | 2001 | - | 2002 | Evaluating and pursuing development of several additional discoveries. |
| | | Years Wells | | | | Dec. 31, | Drilled / | | | Country/Project | 2019 | Acquired | Comment | | (millions of dollars) | | | Papua New Guinea | | | | | | | | - Papua LNG | 246 | | 2017 | Evaluating/progressing development plans. | | - P'nyang | 115 | | 2012 | - | 2018 | Evaluating/progressing development plans. | | Republic of Congo | | | | | | | | - Mer Tres Profonde Sud | 56 | | 2000 | - | 2007 | Evaluating development alternatives, while continuing discussions with the | | | | | | | | government regarding development plan. | | Romania | | | | | | | | - Neptun Deep | 536 | | 2012 | - | 2016 | Continuing discussions with the government regarding development plan. | | Tanzania | | | | | | | | - Tanzania Block 2 | 537 | | 2012 | - | 2018 | Evaluating development alternatives while continuing discussions with the | | | | | | | | government regarding development plan. | | Vietnam | | | | | | | | - Blue Whale | 296 | | 2011 | - | 2015 | Evaluating/progressing development plans. | | Total 2019 (32 projects) | 3,176 | | | | | |
|