v3.20.2
Sales and Other Operating Revenues
9 Months Ended
Sep. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer [Text Block]
Note 19—Sales and Other Operating Revenues
 
Revenue from Contracts with Customers
 
The following table provides further disaggregation
 
of our consolidated sales and other operating
 
revenues:
Millions of Dollars
 
Three Months Ended
Nine Months Ended
September 30
September 30
2020
2019
2020
2019
Revenue from contracts with customers
$
3,078
6,240
9,908
19,932
Revenue from contracts outside the scope of ASC Topic 606
Physical contracts meeting the definition of a derivative
1,280
1,529
3,432
4,981
Financial derivative contracts
28
(13)
(47)
(54)
Consolidated sales and other operating revenues
$
4,386
7,756
13,293
24,859
Revenues from contracts outside the scope of ASC
 
Topic 606 relate primarily to physical gas contracts at
market prices which qualify as derivatives accounted
 
for under ASC Topic 815, “Derivatives and Hedging,”
and for which we have not elected NPNS.
 
There is no significant difference in contractual
 
terms or the policy
for recognition of revenue from these contracts
 
and those within the scope of ASC Topic 606.
 
The following
disaggregation of revenues is provided in conjunction
 
with Note 20—Segment Disclosures and Related
Information:
Millions of Dollars
 
Three Months Ended
Nine Months Ended
September 30
September 30
2020
2019
2020
2019
Revenue from Outside the Scope of ASC Topic 606
by Segment
Lower 48
$
1,018
1,099
2,692
3,823
Canada
152
86
452
427
Europe, Middle East and North Africa
110
344
288
731
Physical contracts meeting the definition of a derivative
$
1,280
1,529
3,432
4,981
Millions of Dollars
 
Three Months Ended
Nine Months Ended
September 30
September 30
2020
2019
2020
2019
Revenue from Outside the Scope of ASC Topic 606
by Product
Crude oil
$
100
266
218
619
Natural gas
1,042
1,159
2,895
4,022
Other
138
104
319
340
Physical contracts meeting the definition of a derivative
$
1,280
1,529
3,432
4,981
Practical Expedients
Typically,
 
our commodity sales contracts are less than
 
12 months in duration; however, in certain specific
cases may extend longer, which may be out to the end of field
 
life.
 
We have long-term commodity sales
contracts which use prevailing market prices at the time of delivery, and under these contracts, the market-
based variable consideration for each performance obligation (i.e., delivery of commodity) is allocated to each
wholly unsatisfied performance obligation within the contract.
 
Accordingly,
we have applied the practical
expedient allowed in ASC Topic 606 and do not disclose the aggregate amount of the transaction price
allocated to performance obligations or when we expect to recognize revenues that are unsatisfied (or partially
unsatisfied) as of the end of the reporting period.
Receivables and Contract Liabilities
Receivables from Contracts with Customers
At September 30, 2020, the “Accounts and notes
 
receivable” line on our consolidated balance sheet,
 
includes
trade receivables of $
1,338
 
million compared with $
2,372
 
million at December 31, 2019, and includes both
contracts with customers within the scope of ASC
 
Topic 606 and those that are outside the scope of ASC
Topic 606.
 
We typically receive payment within 30 days or less (depending on the terms of the invoice) once
delivery is made.
 
Revenues that are outside the scope of ASC Topic 606 relate primarily to
 
physical gas sales
contracts at market prices for which we do not
 
elect NPNS and are therefore accounted for
 
as a derivative
under ASC Topic 815.
 
There is little distinction in the nature
 
of the customer or credit quality of trade
receivables associated with gas sold under contracts
 
for which NPNS has not been elected
 
compared to trade
receivables where NPNS has been elected.
 
Contract Liabilities from Contracts with Customers
We have entered into contractual arrangements where we license proprietary technology
 
to customers related
to the optimization process for operating LNG
 
plants.
 
The agreements typically provide for negotiated
payments to be made at stated milestones.
 
The payments are not directly related to our performance under the
contract and are recorded as deferred revenue to be recognized as revenue when the customer can utilize and
benefit from their right to use the license.
 
Payments are received in installments over the construction period.
Millions of Dollars
Contract Liabilities
At December 31, 2019
$
80
Contractual payments received
8
At September 30, 2020
$
88
Amounts Recognized in the Consolidated Balance
 
Sheet at September 30, 2020
Current liabilities
$
47
Noncurrent liabilities
41
$
88
We expect to recognize the contract liabilities as of September 30, 2020, as revenue during 2021 and 2022.
 
There were
no
 
revenues recognized for the three- and nine-month
 
periods ended September 30, 2020.