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Investments, Loans and Long-Term Receivables | 12 Months Ended
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Dec. 31, 2019
Investments, Loans and Long-Term Receivables and Joint Venture Acquisition Obligation [Abstract] |
Investments, Loans and Long-Term Receivables | Note 6—Investments, Loans and Long-Term Receivables Components of investments, loans and long-term receivables at December 31 were: Millions of Dollars 2019 2018 Equity investments $ 8,234 9,005 Loans and advances—related parties 219 335 Long-term receivables 243 238 Long-term investments in debt securities 133 - Other investments 77 86 $ 8,906 9,664 Equity Investments Affiliated companies in which we had a significant equity investment at December 31, 2019, included: APLNG— 37.5 percent owned joint venture with Origin Energy ( 37.5 percent) and Sinopec ( 25 percent)—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 Qatar Petroleum ( 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 2019 2018 2017 Revenues $ 11,310 11,654 11,554 Income (loss) before income taxes 3,726 3,660 (2,875) Net income (loss) 3,085 3,244 (1,431) Summarized 100 percent balance sheet information for equity method investments in affiliated companies, combined, was as follows: Millions of Dollars 2019 2018 Current assets $ 3,289 3,285 Noncurrent assets 38,905 41,563 Current liabilities 2,603 2,625 Noncurrent liabilities 22,168 23,874 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, 2019, retained earnings included $ 32 million related to the undistributed earnings of affiliated companies. Dividends received from affiliates were $ 1,378 million, $ 1,226 million and $ 605 million in 2019, 2018 and 2017, respectively. APLNG APLNG is focused on CBM production from the Bowen and Surat basins in Queensland, Australia, to supply the domestic gas market and on LNG processing and export sales. 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. The $8.5 billion project finance facility was initially composed of financing agreements executed by APLNG with the Export-Import Bank of the United States for approximately $ 2.9 billion, the Export-Import Bank of China for approximately $ 2.7 billion, and a syndicate of Australian and international commercial banks for approximately $ 2.9 billion. At December 31, 2019, all amounts have been drawn from the facility. APLNG made its first principal and interest repayment in March 2017 and is scheduled to make bi-annual payments until March 2029. APLNG made a voluntary repayment of $ 1.4 billion to the Export-Import Bank of China in September 2018. At the same time, APLNG obtained a United States Private Placement (USPP) bond facility of $ 1.4 billion. APLNG made its first interest payment related to this facility in March 2019, and principal payments are scheduled to commence in September 2023, with bi-annual payments due on the facility until September 2030. During the first quarter of 2019, APLNG refinanced $ 3.2 billion of existing project finance debt through two transactions. As a result of the first transaction, APLNG obtained a commercial bank facility of $ 2.6 billion. APLNG made its first principal and interest repayment in September 2019 with bi-annual payments due on the facility until March 2028. Through the second transaction, APLNG obtained a USPP bond facility of $ 0.6 billion. APLNG made its first interest payment in September 2019, and principal payments are scheduled to commence in September 2023, with bi-annual payments due on the facility until September 2030. In conjunction with the $3.2 billion debt obtained during the first quarter of 2019 to refinance existing project finance debt, APLNG made voluntary repayments of $ 2.2 billion and $ 1.0 billion to a syndicate of Australian and international commercial banks and the Export-Import Bank of China, respectively. At December 31, 2019, a balance of $ 6.7 billion was outstanding on the facilities. See Note 12—Guarantees, for additional information. During the first half of 2017, the outlook for crude oil prices deteriorated, and as a result of significantly reduced price outlooks, the estimated fair value of our investment in APLNG declined to an amount below carrying value. Based on a review of the facts and circumstances surrounding this decline in fair value, we concluded in the second quarter of 2017 the impairment was other than temporary under the guidance of FASB ASC Topic 323, “Investments—Equity Method and Joint Ventures,” and the recognition of an impairment of our investment to fair value was necessary. Accordingly, we recorded a noncash $ 2,384 million, before- and after-tax impairment in our second quarter 2017 results. Fair value was estimated based on an internal discounted cash flow model using estimated future production, an outlook of future prices from a combination of exchanges (short-term) and pricing service companies (long-term), costs, a market outlook of foreign exchange rates provided by a third party, and a discount rate believed to be consistent with those used by principal market participants. The impairment was included in the “Impairments” line on our consolidated income statement. At December 31, 2019, the carrying value of our equity method investment in APLNG was $ 7,228 million. The historical cost basis of our 37.5 percent share of net assets on the books of APLNG was $ 6,751 million, resulting in a basis difference of $ 477 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 exploration and production license areas owned by APLNG, some of which are not currently in production. Any future additional payments are expected to be allocated in a similar manner. Each exploration license area will periodically be reviewed for any indicators of potential impairment, which, if required, would result in acceleration of basis difference amortization. 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 2019, 2018 and 2017 was after-tax expense of $ 36 million, $ 44 million and $ 100 million, respectively, representing the amortization of this basis difference on currently producing licenses. Distributions from APLNG commenced in April 2018. FCCL FCCL Partnership, a Canadian upstream 50/50 general partnership with Cenovus Energy Inc., produces bitumen in the Athabasca oil sands in northeastern Alberta and sells the bitumen blend. Cenovus is the operator and managing partner of FCCL. On May 17, 2017, we completed the sale of our 50 percent nonoperated interest in the FCCL Partnership, as well as the majority of our western Canada gas assets to Cenovus Energy. Financial information presented within this footnote includes our historical interest up to the date of sale. For additional information on the Canada disposition and our investment in Cenovus Energy, see Note 5—Asset Acquisitions and Dispositions and Note 7—Investment in Cenovus Energy. 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 $ 335 million as described below under “Loans and Long- Term Receivables.” At December 31, 2019, the book value of our equity method investment in QG3, excluding the project financing, was $ 797 million. 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. For additional information, see Note 5—Asset Acquisitions and Dispositions. Loans and Long-Term Receivables 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 and long-term receivables to certain affiliated and non-affiliated companies. Loans are recorded when cash is transferred or seller financing is provided to the affiliated or non-affiliated company pursuant to a loan agreement. The loan balance will increase as interest is earned on the outstanding loan balance and will decrease as interest and principal payments are received. Interest is earned at the loan agreement’s stated interest rate. Loans and long-term receivables are assessed for impairment when events indicate the loan balance may not be fully recovered. At December 31, 2019, significant loans to affiliated companies include $335 million in project financing to QG3. We own a 30 percent interest in QG3, for which we use the equity method of accounting. The other participants in the project are affiliates of Qatar Petroleum and Mitsui. QG3 secured project financing of $ 4.0 billion in December 2005, consisting of $ 1.3 billion of loans from 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 project participants. Semi-annual repayments began in January 2011 and will extend through July 2022. The long-term portion of these loans is included in the “Loans and advances—related parties” line on our consolidated balance sheet, while the short-term portion is in “Accounts and notes receivable—related parties.”

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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