Asset Retirement Obligations and Accrued Environmental Costs	12 Months Ended
Dec. 31, 2019
Asset Retirement Obligation Disclosure [Abstract]
Asset Retirement Obligations and Accrued Environmental Costs	Note 10—Asset Retirement Obligations and Accrued Environmental Costs Asset retirement obligations and accrued environmental costs at December 31 were: Millions of Dollars 2019 2018 Asset retirement obligations $ 6,206 7,908 Accrued environmental costs 171 178 Total asset retirement obligations and accrued environmental costs 6,377 8,086 Asset retirement obligations and accrued environmental costs due within one year* (1,025) (398) Long-term asset retirement obligations and accrued environmental costs $ 5,352 7,688 *Classified as a current liability on the balance sheet under “Other accruals.” $ 741 million relates to assets which are held for sale as of December 31, 2019. For additional information see Note 5—Asset Acquisitions and Dispositions. Asset Retirement Obligations We record the fair value of a liability for an ARO when it is incurred (typically when the asset is installed at the production location). When the liability is initially recorded, we capitalize the associated asset retirement cost by increasing the carrying amount of the related PP&E. If, in subsequent periods, our estimate of this liability changes, we will record an adjustment to both the liability and PP&E. Over time, the liability increases for the change in its present value, while the capitalized cost depreciates over the useful life of the related asset. We have numerous AROs we are required to perform under law or contract once an asset is permanently taken out of service. Most of these obligations are not expected to be paid until several years, or decades, in the future and will be funded from general company resources at the time of removal. Our largest individual obligations involve plugging and abandonment of wells and removal and disposal of offshore oil and gas platforms around the world, as well as oil and gas production facilities and pipelines in Alaska. During 2019 and 2018, our overall ARO changed as follows: Millions of Dollars 2019 2018 Balance at January 1 $ 7,908 7,798 Accretion of discount 322 348 New obligations 155 657 Changes in estimates of existing obligations 50 (266) Spending on existing obligations (229) (228) Property dispositions (1,920) (161) Foreign currency translation (80) (240) Balance at December 31 $ 6,206 7,908 Accrued Environmental Costs Total accrued environmental costs at December 31, 2019 and 2018, were $ 171 million and $ 178 million, respectively. We had accrued environmental costs of $ 112 million and $ 100 million at December 31, 2019 and 2018, respectively, related to remediation activities in the U.S. and Canada. We had also accrued in Corporate and Other $ 47 million and $ 67 million of environmental costs associated with sites no longer in operation at December 31, 2019 and 2018, respectively. In addition, $ 12 million and $ 11 million were included at both December 31, 2019 and 2018, respectively, where the company has been named a potentially responsible party under the Federal Comprehensive Environmental Response, Compensation and Liability Act, or similar state laws. Accrued environmental liabilities are expected to be paid over periods extending up to 30 years. Expected expenditures for environmental obligations acquired in various business combinations are discounted using a weighted-average 5 percent discount factor, resulting in an accrued balance for acquired environmental liabilities of $ 97 million at December 31, 2019. The expected future undiscounted payments related to the portion of the accrued environmental costs that have been discounted are: $ 10 million in 2020, $ 7 million in 2021, $ 10 million in 2022, $ 3 million in 2023, $ 2 million in 2024, and $ 108 million for all future years after 2024.

Note 10—Asset Retirement Obligations and Accrued

Environmental Costs

Asset retirement obligations and accrued environmental

costs at December 31 were:

Millions of Dollars

2019

2018

Asset retirement obligations

6,206

7,908

Accrued environmental costs

171

178

Total asset retirement obligations and accrued environmental costs

6,377

8,086

Asset retirement obligations and accrued environmental

costs due within one year*

(1,025)

(398)

Long-term asset retirement obligations and accrued

environmental costs

5,352

7,688

Asset Retirement Obligations

We record the fair value of a liability for an ARO when it is incurred (typically when

the asset is installed at

the production location).

When the liability is initially recorded,

we capitalize the associated asset retirement

cost by increasing the carrying amount of the related

PP&E.

If, in subsequent periods, our estimate

of this

liability changes, we will record an adjustment

to both the liability and PP&E.

Over time, the liability

increases for the change in its present value,

while the capitalized cost depreciates over the

useful life of the

related asset.

We have numerous AROs we are required to perform under law or contract once

an asset is permanently taken

out of service.

Most of these obligations are not expected

to be paid until several years, or decades, in

the

future and will be funded from general company

resources at the time of removal.

Our largest individual

obligations involve plugging and abandonment

of wells and removal and disposal of offshore oil

and gas

platforms around the world, as well as oil and

gas production facilities and pipelines in Alaska.

During 2019 and 2018, our overall ARO changed

as follows:

Millions of Dollars

2019

2018

Balance at January 1

7,908

7,798

Accretion of discount

322

348

New obligations

155

657

Changes in estimates of existing obligations

(266)

Spending on existing obligations

(229)

(228)

Property dispositions

(1,920)

(161)

Foreign currency translation

(80)

(240)

Balance at December 31

6,206

7,908

Accrued Environmental Costs

Total accrued environmental costs at December 31, 2019 and 2018, were $

171

million and $

178

million,

respectively.

We had accrued environmental costs of $

112

million and $

100

million at December 31, 2019 and 2018,

respectively, related to remediation activities in the U.S. and Canada.

We had also accrued in Corporate and

Other $

million and $

million of environmental costs associated

with sites no longer in operation at

December 31, 2019 and 2018, respectively.

In addition, $

million and $

million were included at both

December 31, 2019 and 2018, respectively, where the company has been

named a potentially responsible party

under the Federal Comprehensive Environmental

Response, Compensation and Liability

Act, or similar state

laws.

Accrued environmental liabilities are expected to

be paid over periods extending up to

years.

Expected expenditures for environmental obligations

acquired in various business combinations

are discounted

using a weighted-average

percent discount factor, resulting in an accrued balance for acquired

environmental

liabilities of $

million at December 31, 2019.

The expected future undiscounted payments

related to the

portion of the accrued environmental costs that

have been discounted are: $

million in 2020, $

million in

2021, $

million in 2022, $

million in 2023, $

million in 2024, and $

108

million for all future years

after 2024.