| Investments, Loans and Long-Term Receivables |
Note 4—Investments, Loans and Long-Term Receivables Components of investments, loans and long-term receivables at December 31 were: Millions of Dollars 2021 2020 Equity investments $ 6,701 7,596 Loans and advances—related parties - 114 Long-term receivables 98 137 Long-term investments in debt securities 248 217 Other investments 66 67 $ 7,113 8,131 Equity Investments Affiliated companies in which we had a significant equity investment at December 31, 2021, included: APLNG— 37.5 percent owned joint venture with Origin Energy ( 37.5 25 to produce CBM from the Bowen and Surat basins in Queensland, Australia, as well as process and export LNG. Qatar Liquefied Gas Company Limited (3) (QG3)— 30 percent owned joint venture with affiliates of QatarEnergy ( 68.5 percent) and Mitsui & Co., Ltd. ( 1.5 percent)—produces and liquefies natural gas from Qatar’s North Field, as well as exports LNG. Summarized 100 percent earnings information for equity method investments in affiliated companies, combined, was as follows: Millions of Dollars 2021 2020 2019 Revenues $ 11,824 7,931 11,310 Income before income taxes 3,946 1,843 3,726 Net income 2,557 1,426 3,085 Summarized 100 percent balance sheet information for equity method investments in affiliated companies, combined, was as follows: Millions of Dollars 2021 2020 Current assets $ 4,493 2,579 Noncurrent assets 36,602 35,257 Current liabilities 3,498 2,110 Noncurrent liabilities 17,465 18,099 Our share of income taxes incurred directly by an equity method investee is reported in equity in earnings of affiliates, and as such is not included in income taxes on our consolidated financial statements. At December 31, 2021, retained earnings included $ 42 million related to the undistributed earnings of affiliated companies. Dividends received from affiliates were $ 1,279 1,076 1,378 APLNG is a joint venture focused on producing CBM from the Bowen and Surat basins in Queensland, Australia. Natural gas is sold to domestic customers and LNG is processed and exported to Asia Pacific markets. Our investment in APLNG gives us access to CBM resources in Australia and enhances our LNG position. The majority of APLNG LNG is sold under two long-term sales and purchase agreements, supplemented with sales of additional LNG spot cargoes targeting the Asia Pacific markets. Origin Energy, an integrated Australian energy company, is the operator of APLNG’s production and pipeline system, while we operate the LNG facility. APLNG executed project financing agreements for an $ 8.5 billion project finance facility in 2012. All amounts were drawn from the facility. APLNG achieved financial completion on its original $ 8.5 billion project finance facility during the third quarter of 2017, resulting in the facility being nonrecourse. The project financing facility has been refinanced over time and at December 31, 2021, this facility was composed of a financing agreement with the Export-Import Bank of the United States, a commercial bank facility and two United States Private Placement note facilities. APLNG made its first principal and interest repayment in March 2017 and is scheduled to make bi-annual payments until September 2030. At December 31, 2021, a balance of $ 5.7 billion was outstanding on the facilities. During the fourth quarter of 2021, Origin Energy Limited agreed to the sale of 10 percent of their interest in APLNG for $ 1.645 billion, before customary adjustments. ConocoPhillips announced in December 2021 that we were exercising our preemption right under the APLNG Shareholders Agreement to purchase an additional 10 shareholding interest in APLNG, subject to government approvals. The sales price associated with this preemption right was determined to reflect a relevant observable market participant view of APLNG’s fair value which was below the carrying value of our existing investment in APLNG. Based on a review of the facts and circumstances surrounding this decline in fair value, we concluded in the fourth quarter of 2021 the impairment was other than temporary under the guidance of FASB ASC Topic 323, and the recognition of an impairment of our existing investment was necessary. Accordingly, we recorded a noncash $ 688 million, before-tax and after-tax impairment in the fourth quarter of 2021. The impairment, which is included in the “Impairments” line on our consolidated income statement, had the effect of reducing the carrying value of our existing investment to $ 5,574 December 31, 2021. This carrying value is included in the “Investments and long-term receivables” line on our consolidated balance sheet. The historical cost basis of our 37.5 percent share of net assets on the books of APLNG was $ 5,523 resulting in a basis difference of $ 51 million on our books. The basis difference, which is substantially all associated with PP&E and subject to amortization, has been allocated on a relative fair value basis to individual production license areas owned by APLNG. Any future additional payments are expected to be allocated in a similar manner. As the joint venture produces natural gas from each license, we amortize the basis difference allocated to that license using the unit-of-production method. Included in net income (loss) attributable to ConocoPhillips for 2021, 2020 and 2019 was after-tax expense of $ 39 41 36 respectively, representing the amortization of this basis difference on currently producing licenses. QG3 QG3 is a joint venture that owns an integrated large-scale LNG project located in Qatar. We provided project financing, with a current outstanding balance of $ 114 million as described below under “Loans.” At December 31, 2021, the book value of our equity method investment in QG3, excluding the project financing, was $ 736 We have terminal and pipeline use agreements with Golden Pass LNG Terminal and affiliated Golden Pass Pipeline near Sabine Pass, Texas, intended to provide us with terminal and pipeline capacity for the receipt, storage and regasification of LNG purchased from QG3. We previously held a 12.4 percent interest in Golden Pass LNG Terminal and Golden Pass Pipeline, but we sold those interests in the second quarter of 2019 while retaining the basic use agreements. Currently, the LNG from QG3 is being sold to markets outside of the U.S. Loans As part of our normal ongoing business operations and consistent with industry practice, we enter into numerous agreements with other parties to pursue business opportunities. Included in such activity are loans to certain affiliated and non-affiliated companies. At December 31, 2021, significant loans to affiliated companies include $ 114 million in project financing to QG3 which is recorded within the “Accounts and notes receivable—related parties” line on our consolidated balance sheet. QG3 secured project financing of $ 4.0 billion in December 2005, consisting of $ 1.3 export credit agencies (ECA), $ 1.5 billion from commercial banks and $ 1.2 billion from ConocoPhillips. The ConocoPhillips loan facilities have substantially the same terms as the ECA and commercial bank facilities. On December 15, 2011, QG3 achieved financial completion and all project loan facilities became nonrecourse to the Semi-annual repayments began in January 2011 and will extend through July 2022. |