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PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended
--- | ---
Dec. 31, 2019
PROPERTY PLANT AND EQUIPMENT |
PROPERTY, PLANT AND EQUIPMENT | 15. PROPERTY, PLANT AND EQUIPMENT
($ millions) |  | Oil and Gas Properties |  | Plant and Equipment |  | Total |  |
Cost |  |  |  |  |  |  |  |
At December 31, 2017 |  | 36 209 |  | 78 639 |  | 114 848 |  |
| Additions |  | 1 221 |  | 3 958 |  | 5 179 |  |
| Transfers from exploration and evaluation |  | 31 |  | — |  | 31 |  |
| Acquisitions (notes 32 to 34) |  | 289 |  | 948 |  | 1 237 |  |
| Changes in decommissioning and restoration |  | 85 |  | (22 | ) | 63 |  |
| Disposals and derecognition |  | (375 | ) | (4 785 | ) | (5 160 | ) |
| Foreign exchange adjustments |  | 385 |  | 291 |  | 676 |  |
At December 31, 2018 |  | 37 845 |  | 79 029 |  | 116 874 |  |
| Adoption of IFRS 16 (note 5) |  | — |  | 1 792 |  | 1 792 |  |
| Additions |  | 1 245 |  | 4 351 |  | 5 596 |  |
| Changes in decommissioning and restoration |  | 1 846 |  | 49 |  | 1 895 |  |
| Disposals and derecognition |  | (116 | ) | (439 | ) | (555 | ) |
| Foreign exchange adjustments |  | (224 | ) | (214 | ) | (438 | ) |
At December 31, 2019 |  | 40 596 |  | 84 568 |  | 125 164 |  |
Accumulated provision |  |  |  |  |  |  |  |
At December 31, 2017 |  | (17 975 | ) | (23 380 | ) | (41 355 | ) |
| Depreciation, depletion, amortization and impairment |  | (1 739 | ) | (3 849 | ) | (5 588 | ) |
| Disposals and derecognition |  | 255 |  | 4 545 |  | 4 800 |  |
| Foreign exchange adjustments |  | (324 | ) | (162 | ) | (486 | ) |
At December 31, 2018 |  | (19 783 | ) | (22 846 | ) | (42 629 | ) |
| Depreciation, depletion, amortization and impairment |  | (2 871 | ) | (7 764 | ) | (10 635 | ) |
| Disposals and derecognition |  | 116 |  | 349 |  | 465 |  |
| Foreign exchange adjustments |  | 149 |  | 126 |  | 275 |  |
At December 31, 2019 |  | (22 389 | ) | (30 135 | ) | (52 524 | ) |
Net property, plant and equipment |  |  |  |  |  |  |  |
| December 31, 2018 |  | 18 062 |  | 56 183 |  | 74 245 |  |
| December 31, 2019 |  | 18 207 |  | 54 433 |  | 72 640 |  |
|  | December 31, 2019 |  | December 31, 2018 |
($ millions) |  | Cost |  | Accumulated Provision |  | Net Book Value |  | Cost |  | Accumulated Provision |  | Net Book Value |
Oil Sands |  | 85 246 |  | (30 581 | ) | 54 665 |  | 80 295 |  | (22 654 | ) | 57 641 |
Exploration and Production |  | 22 876 |  | (15 298 | ) | 7 578 |  | 21 867 |  | (14 075 | ) | 7 792 |
Refining and Marketing |  | 15 342 |  | (5 768 | ) | 9 574 |  | 13 627 |  | (5 092 | ) | 8 535 |
Corporate and Eliminations |  | 1 700 |  | (877 | ) | 823 |  | 1 085 |  | (808 | ) | 277 |
|  | 125 164 |  | (52 524 | ) | 72 640 |  | 116 874 |  | (42 629 | ) | 74 245 |
At December 31, 2019, the balance of assets under construction and not subject to depreciation or depletion was $5.6 billion (December 31, 2018 – $4.7 billion). Due to continued volatility in the crude oil price environment and resulting declines in forecasted long-term heavy crude oil prices, the company performed an asset impairment test on its Fort Hills CGU in the Oil Sands segment. Due to an increase to forecasted capital expenditures within the White Rose CGU, the company also performed an impairment test within the Exploration and Production segment as at December 31, 2019. The impairment tests were performed using recoverable amounts based on the fair value less cost of disposal. An expected cash flow approach was used with the key assumptions discussed below (Level 3 fair value inputs – note 26): Oil Sands As a result of the impairment test, the company recorded impairment of $2.80 billion (net of taxes of $0.91 billion) on its share of the Fort Hills project in the Oil Sands segment using the following asset-specific assumptions:
• | Western Canadian Select (WCS) price forecast of US$40.75/bbl in 2020, US$45.60/bbl in 2021, US$49.65/bbl in 2022, US$51.55/bbl in 2023 and US$52.90/bbl in 2024, escalating at 2% per year thereafter over the life of the project up to 2060, adjusted for asset-specific location and quality differentials;
• | the company's share of production ranging from 96,000 to 106,000 bbls/d over the life of the project;
• | cash operating costs averaging $22/bbl to $24/bbl over the life of the project (expressed in real dollars), reflects Operating, Selling and General expense adjusted for non-production costs including Share-based compensation, Research costs, and Excess power revenue; and
• | risk-adjusted discount rate of 7.5% (after-tax).
The recoverable amount of the Fort Hills CGU was $7.7 billion as at December 31, 2019, which also includes the cost of carbon compliance in accordance with current provincial and federal regulations which starts at $30/tonne in 2020, reaches $50/tonne by 2022 and escalates at the rate of inflation thereafter. Estimate of the recoverable amount is most sensitive to the WCS price forecast and discount rate. A 5% decrease in price would have resulted in an increase to the impairment charge of approximately $1.2 billion (after-tax) on the company's share of the Fort Hills assets. A 1% increase in the discount rate would have resulted in an increase to the impairment charge of approximately $900 million (after-tax) on the company's share of the Fort Hills assets. Exploration and Production As a result of the impairment test, the company recorded impairment of $393 million (net of taxes of $128 million) on its share of the White Rose assets in the Exploration and Production segment using the following asset-specific assumptions:
• | Brent price forecast of US$65/bbl in 2020, escalating at 2% per year thereafter over the life of the project up to 2036 and adjusted for asset-specific location and quality differentials;
• | the company's share of production of approximately 8,700 bbls/d over the life of the project;
• | the company's share of future capital expenditures of $1.4 billion, including the West White Rose expansion; and
• | risk-adjusted discount rate of 9.0% (after-tax).
The recoverable amount of the White Rose CGU was $360 million as at December 31, 2019, which also includes the cost of carbon compliance in accordance with current provincial and federal regulations which starts at $30/tonne in 2020, reaches $50/tonne by 2022 and escalates at the rate of inflation thereafter. Estimate of the recoverable amount is most sensitive to the Brent price forecast and discount rate. A 5% decrease in price would have resulted in an increase to the impairment charge of approximately $85 million (after-tax) on the company's share of the White Rose assets. A 1% increase in the discount rate would have resulted in an increase to the impairment charge of approximately $35 million (after-tax) on the company's share of the White Rose assets.

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