v3.21.1
Sales and Other Operating Revenues
3 Months Ended
Mar. 31, 2021
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer [Text Block]
Note 16—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
March 31
2021
2020
Revenue from contracts with customers
$
7,161
4,911
Revenue from contracts outside the scope of ASC
 
Topic 606
Physical contracts meeting the definition of a derivative
2,974
1,296
Financial derivative contracts
(309)
(49)
Consolidated sales and other operating revenues
$
9,826
6,158
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 17—Segment Disclosures and Related
Information:
Millions of Dollars
 
Three Months Ended
March 31
2021
2020
Revenue from Outside the Scope of ASC Topic 606 by Segment
Lower 48
$
2,466
976
Canada
303
179
Europe, Middle East and North Africa
205
141
Physical contracts meeting the definition of a derivative
$
2,974
1,296
Millions of Dollars
 
Three Months Ended
March 31
2021
2020
Revenue from Outside the Scope of ASC Topic 606 by Product
Crude oil
$
124
92
Natural gas
2,727
1,090
Other
123
114
Physical contracts meeting the definition of a derivative
$
2,974
1,296
Practical Expedients
Typically,
 
our
 
commodity
 
sales
 
contracts
 
are
 
less
 
than
 
12
 
months
 
in
 
duration;
 
however,
 
in
 
certain
 
specific
cases they 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 March 31, 2021, the “Accounts and notes
 
receivable” line on our consolidated balance sheet
 
included
 
trade
receivables of $
3,380
 
million compared with $
1,827
 
million at December 31, 2020, and included
 
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 with 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, 2020
$
97
Contractual payments received
7
Revenue recognized
(62)
At March 31, 2021
$
42
Amounts Recognized in the Consolidated
 
Balance Sheet at March 31, 2021
Current liabilities
$
42
We expect to recognize the contract liabilities at March 31, 2021, as revenue in the first quarter of 2022.