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Segmented Information
 12 Months Ended
Dec. 31, 2019
Operating Segments [Abstract]  
Segmented Information
Segmented Information
The Company’s exploration and production activities are conducted in three geographic segments: North America, North Sea and Offshore Africa. These activities include the exploration, development, production and marketing of crude oil, natural gas liquids and natural gas. The Company’s Oil Sands Mining and Upgrading activities are reported in a separate segment from exploration and production activities. Midstream and Refining activities include the Company’s pipeline operations, an electricity co-generation system and Redwater Partnership.
Segmented revenue and segmented results include transactions between business segments. Sales between segments are made at prices that approximate market prices, taking into account the volumes involved. These transactions and any unrealized profits and losses are eliminated on consolidation, unless unrealized losses provide evidence of an impairment of the asset transferred. Sales to external customers are based on the location of the seller.
 
North America
North Sea
Offshore Africa
(millions of Canadian dollars)
2019

2018

2017

2019

2018

2017

2019

2018

2017

Segmented product sales
 
 
 
 
 
 
 
 
 
Crude oil and NGLs (1)
$
9,679

$
7,254

$
7,655

$
860

$
753

$
666

$
632

$
628

$
579

Natural gas
1,150

1,256

1,506

57

140

118

67

70

53

Other (2)
6

—

—

5

—

—

8

—

—

Total segmented product sales
10,835

8,510

9,161

922

893

784

707

698

632

Less: royalties
(998
)
(723
)
(809
)
(2
)
(2
)
(1
)
(42
)
(51
)
(41
)
Segmented revenue
9,837

7,787

8,352

920

891

783

665

647

591

Segmented expenses
 
 
 
 
 
 
 
 
 
Production
2,425

2,405

2,362

391

405

400

109

208

226

Transportation, blending and feedstock (1)
2,935

2,587

2,291

19

22

31

2

2

1

Depletion, depreciation and amortization
3,326

3,132

3,243

308

257

509

242

201

205

Asset retirement obligation accretion
95

87

80

28

29

27

6

9

9

Realized risk management (commodity derivatives)
49

(10
)
(45
)
—

—

—

—

—

—

Gain on acquisition, disposition and revaluation of properties
—

(277
)
(35
)
—

(139
)
—

—

(36
)
—

Equity loss (gain) from investments
—

—

—

—

—

—

—

—

—

Total segmented expenses
8,830

7,924

7,896

746

574

967

359

384

441

Segmented earnings (loss) before the following
$
1,007

$
(137
)
$
456

$
174

$
317

$
(184
)
$
306

$
263

$
150

Non–segmented expenses
 
 
 
 
 
 
 
 
 
Administration
 
 
 
 
 
 
 
 
 
Share-based compensation
 
 
 
 
 
 
 
 
 
Interest and other financing expense
 
 
 
 
 
 
 
 
 
Risk management activities (other)
 
 
 
 
 
 
 
 
 
Foreign exchange (gain) loss
 
 
 
 
 
 
 
 
 
Loss (gain) from investments
 
 
 
 
 
 
 
 
 
Total non–segmented expenses
 
 
 
 
 
 
 
 
 
Earnings before taxes
 
 
 
 
 
 
 
 
 
Current income tax expense (recovery)
 
 
 
 
 
 
 
 
 
Deferred income tax (recovery) expense
 
 
 
 
 
 
 
 
 
Net earnings
 
 
 
 
 
 
 
 
 

(1)
Includes blending and feedstock costs associated with the processing of third party bitumen and other purchased feedstock in the Oil Sands Mining and Upgrading segment
(2)
'Other' includes recoveries associated with the joint operation partners' share of the costs of lease contracts and other income of a trivial nature.
Inter-segment elimination and Other includes internal transportation and electricity charges. Production, processing and other purchasing and selling activities that are not included in the above segments are also reported in the segmented information as Inter-segment eliminations and Other. In connection with the adoption of IFRS 15 on January 1, 2018, the Company has reclassified certain comparative figures for product sales, production expense and transportation, blending and feedstock expense for the years ended December 31, 2017 in a manner consistent with the presentation adopted for the year ended December 31, 2018.
Operating segments are reported in a manner consistent with the internal reporting provided to the Company’s chief operating decision makers.


 Oil Sands Mining
and Upgrading
Midstream and Refining
 Inter–segment
elimination and Other
Total
2019

2018

2017

2019

2018

2017

2019

2018

2017

2019

2018

2017

 
 
 
 
 
 
 
 
 
 
 
 
$
11,340

$
11,521

$
7,072

$
88

$
102

$
102

$
351

$
410

$
448

$
22,950

$
20,668

$
16,522

—

—

—

—

—

—

145

148

161

1,419

1,614

1,838

6

—

—

—

—

—

—

—

—

25

—

—

11,346

11,521

7,072

88

102

102

496

558

609

24,394

22,282

18,360

(481
)
(479
)
(167
)
—

—

—

—

—

—

(1,523
)
(1,255
)
(1,018
)
10,865

11,042

6,905

88

102

102

496

558

609

22,871

21,027

17,342

 
 
 
 
 
 
 
 
 
 
 
 
3,276

3,367

2,600

20

21

16

56

58

71

6,277

6,464

5,675

1,306

1,087

679

—

—

—

437

491

527

4,699

4,189

3,529

1,656

1,557

1,220

14

14

9

—

—

—

5,546

5,161

5,186

61

61

48

—

—

—

—

—

—

190

186

164

—

—

—

—

—

—

—

—

—

49

(10
)
(45
)
—

—

(230
)
—

—

(114
)
—

—

—

—

(452
)
(379
)
—

—

—

287

5

(31
)
—

—

—

287

5

(31
)
6,299

6,072

4,317

321

40

(120
)
493

549

598

17,048

15,543

14,099

$
4,566

$
4,970

$
2,588

$
(233
)
$
62

$
222

$
3

$
9

$
11

$
5,823

$
5,484

$
3,243

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
344

325

319

 
 
 
 
 
 
 
 
 
223

(146
)
134

 
 
 
 
 
 
 
 
 
836

739

631

 
 
 
 
 
 
 
 
 
28

(124
)
80

 
 
 
 
 
 
 
 
 
(570
)
827

(787
)
 
 
 
 
 
 
 
 
 
6

341

(7
)
 
 
 
 
 
 
 
 
 
867

1,962

370

 
 
 
 
 
 
 
 
 
4,956

3,522

2,873

 
 
 
 
 
 
 
 
 
434

374

(164
)
 
 
 
 
 
 
 
 
 
(894
)
557

640

 
 
 
 
 
 
 
 
 
$
5,416

$
2,591

$
2,397


(1)
Includes blending and feedstock costs associated with the processing of third party bitumen and other purchased feedstock in the Oil Sands Mining and Upgrading segment
(2)
'Other' includes recoveries associated with the joint operation partners' share of the costs of lease contracts and other income of a trivial nature.
CAPITAL EXPENDITURES (1) 
 
 
2019
 
2018
 
 
Net
 expenditures

 
Non-cash
and fair value
changes (2)

 
Capitalized
 costs

 
Net
expenditures

 
Non-cash
and fair value
changes (2)

 
Capitalized
 costs

 
 
 
 
 
 
 
 
 
 
 
 
 
Exploration and
evaluation assets
 
 
 
 
 
 
 
 
 
 
 
 
Exploration and
   Production
 
 
 
 
 
 
 
 
 
 
 
 
North America (3)
 
$
129

 
$
(219
)
 
$
(90
)
 
$
118

 
$
(52
)
 
$
66

North Sea
 
—

 
—

 
—

 
—

 
—

 
—

Offshore Africa (4)
 
35

 
(2
)
 
33

 
(54
)
 
—

 
(54
)
Oil Sands Mining
   and Upgrading (5)
 
—

 
—

 
—

 
218

 
(225
)
 
(7
)
 
 
$
164

 
$
(221
)
 
$
(57
)
 
$
282

 
$
(277
)
 
$
5

 
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and
   equipment
 
 

 
 

 
 

 
 

 
 

 
 

Exploration and
   Production
 
 

 
 

 
 

 
 

 
 

 
 

North America (3)
 
$
4,702

 
$
918

 
$
5,620

 
$
2,553

 
$
(362
)
 
$
2,191

North Sea
 
196

 
153

 
349

 
131

 
(597
)
 
(466
)
Offshore Africa (6)
 
194

 
(1,476
)
 
(1,282
)
 
228

 
(86
)
 
142

 
 
5,092

 
(405
)
 
4,687

 
2,912

 
(1,045
)
 
1,867

Oil Sands Mining
   and Upgrading (7)
 
1,525

 
344

 
1,869

 
1,229

 
(166
)
 
1,063

Midstream and Refining
 
10

 
—

 
10

 
13

 
—

 
13

Head office
 
34

 
(3
)
 
31

 
21

 
—

 
21

 
 
$
6,661

 
$
(64
)
 
$
6,597

 
$
4,175

 
$
(1,211
)
 
$
2,964

(1)
This table provides a reconciliation of capitalized costs, reported in note 6 and note 7, to net expenditures reported in the investing activities section of the statements of cash flows. The reconciliation excludes the impact of foreign exchange adjustments.
(2)
Derecognitions, asset retirement obligations, transfer of exploration and evaluation assets, and other fair value adjustments.
(3)
Includes cash consideration paid of $91 million for exploration and evaluation assets and $3,126 million for property, plant and equipment acquired from Devon in 2019.
(4)
Excludes the impact of a pre-tax cash gain of $16 million on the disposition of certain exploration and evaluation assets in 2018.
(5)
In 2018, total purchase consideration for the acquisition of the Joslyn oil sands project included $222 million for exploration and evaluation assets and $4 million for asset retirement obligations assumed. In addition, following integration of the Joslyn oil sands project into the Horizon mine plan and determination of proved crude oil reserves, the exploration and evaluation assets were transferred to property, plant, and equipment.
(6)
Includes a derecognition of property, plant and equipment of $1,515 million following the FPSO demobilization at the Olowi field, Gabon in 2019.
(7)
Net expenditures include capitalized interest and share-based compensation.
SEGMENTED ASSETS
 
 
2019

 
2018

Exploration and Production
 
 
 
 
North America
 
$
30,963

 
$
27,199

North Sea
 
1,948

 
1,699

Offshore Africa
 
1,529

 
1,471

Other
 
30

 
33

Oil Sands Mining and Upgrading
 
42,006

 
39,634

Midstream and Refining
 
1,418

 
1,413

Head office
 
227

 
110

 
 
$
78,121

 
$
71,559