Impairments

9 Months Ended

Sep. 30, 2012

Note 8—Impairments

During the three- and nine-month periods of 2012 and 2011, we recognized before-tax impairment charges within the following segments:

	Millions of Dollars
	Three Months Ended			Nine Months Ended
	September 30			September 30
		2012	2011	2012	2011

Canada	$	-	-	213	-
Europe		-	-	79	-
Asia Pacific and Middle East		-	-	4	-
	$	-	-	296	-

The nine-month period of 2012 included a $213 million property impairment in our Canada segment for the carrying value of capitalized project development costs associated with our Mackenzie Gas Project. Advancement of the project was suspended indefinitely in the first quarter of 2012 due to a continued decline in market conditions and the lack of acceptable commercial terms. We also recorded a $481 million impairment for the undeveloped leasehold costs associated with the project, which was included in the “Exploration expenses” line on our consolidated income statement. In addition, the nine-month period of 2012 included a $78 million impairment in our Europe segment, primarily due to an increase in the asset retirement obligation for the Don Field in the United Kingdom, which has ceased production. See Note 20—Segment Disclosures and Related Information, for additional information on our segments.