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FAIR VALUE MEASUREMENTS | 12 Months Ended
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Dec. 31, 2016
FAIR VALUE MEASUREMENTS |
FAIR VALUE MEASUREMENTS |
NOTE 15 | FAIR VALUE MEASUREMENTS
FAIR VALUES – RECURRING In January 2012, Occidental entered into a long-term contract to purchase CO2. This contract contains a price adjustment clause that is linked to changes in NYMEX crude oil prices. Occidental determined that the portion of this contract linked to NYMEX oil prices is not clearly and closely related to the host contract, and Occidental therefore bifurcated this embedded pricing feature from its host contract and accounts for it at fair value in the consolidated financial statements. The following tables provide fair value measurement information for assets and liabilities that are measured on a recurring basis:
(in millions) |  | Fair Value Measurements at December 31, 2016 Using |  | Netting and Collateral |  | Total Fair Value
Description |  |  |  | Level 1 |  | Level 2 |  | Level 3 |  |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Embedded derivative |  | Accrued liabilities |  | $ | — |  |  | $ | 43 |  |  | $ | — |  |  | $ | — |  |  | $ | 43 |
| Deferred credits and liabilities |  | $ | — |  |  | $ | 178 |  |  | $ | — |  |  | $ | — |  |  | $ | 178 |
(in millions) |  | Fair Value Measurements at December 31, 2015 Using |  | Netting and Collateral |  | Total Fair Value
Description |  |  |  | Level 1 |  | Level 2 |  | Level 3 |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Available for sale investment |  |  |  | $ | 167 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 167 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Embedded derivative |  | Accrued liabilities |  | $ | — |  |  | $ | 47 |  |  | $ | — |  |  | $ | — |  |  | $ | 47 |
| Deferred credits and liabilities |  | $ | — |  |  | $ | 267 |  |  | $ | — |  |  | $ | — |  |  | $ | 267 |
FAIR VALUES – NONRECURRING During the 12 months ended December 31, 2016, Occidental recognized pre-tax impairment charges of $15 million related to proved oil and gas properties. As a result of the sharp decline of the forward price curve during 2015, as well as the decision to sell or exit non-core operations, Occidental recognized approximately $6.5 billion in pre-tax impairment charges related to proved oil and gas properties. Internationally, Occidental recognized $4.7 billion in pre-tax impairment charges related to $1.8 billion in charges in Oman, $1.3 billion in Iraq and Libya, $1 billion in Qatar, and $550 million in Colombia and Bolivia. Domestically, Occidental recognized approximately $763 million pre-tax impairment charges related to the sale of the Williston assets, $460 million pre-tax impairment charges for assets in the Piceance Basin as well as a $554 million pre-tax impairment charges related to proved oil and gas properties in South Texas. The impairment tests, including the fair value estimation, incorporated a number of assumptions involving expectations of future cash flows. These assumptions included estimates of future product prices, which Occidental based on forward price curves and, where applicable, contractual prices, estimates of oil and gas reserves, estimates of future expected operating and development costs and a risk adjusted discount rate of 8-20 percent. These properties were impacted by persistently worldwide low oil and natural gas prices and changing management's development plans. Occidental used the income approach to measure the fair value of these properties, using inputs categorized as Level 3 in the fair value hierarchy. In the fourth quarter 2015, Occidental recognized approximately $814 million in pre-tax impairment charges for a Midstream CO2 treatment plant related to recurring CO2 shortfalls and unpaid penalty fees. In 2015, Occidental recognized approximately $121 million pre-tax charges related to the impairments of Chemical assets.
(in millions) |  | Fair Value Measurements at December 31, 2015 Using |  | Net Book Value (a) |  | Total Pre-tax (Non-cash) Impairment Loss
Description |  | Level 1 |  | Level 2 |  | Level 3 |  |
Assets: |  |  |  |  |  |  |  |  |  |
Impaired proved oil and gas assets - international |  | $ | — |  |  | $ | — |  |  | $ | 2,666 |  |  | $ | 7,359 |  |  | $ | 4,693 |
Impaired proved oil and gas assets - domestic |  | $ | — |  |  | $ | — |  |  | $ | 625 |  |  | $ | 1,655 |  |  | $ | 1,030 |
Impaired Midstream assets |  | $ | — |  |  | $ | — |  |  | $ | 50 |  |  | $ | 891 |  |  | $ | 841 |
Impaired Chemical property, plant, and equipment |  | $ | — |  |  | $ | — |  |  | $ | 3 |  |  | $ | 124 |  |  | $ | 121 |
(in millions) |  | Fair Value Measurements at September 30, 2015 Using |  | Net Book Value (a) |  | Total Pre-tax (Non-cash) Impairment Loss
Description |  | Level 1 |  | Level 2 |  | Level 3 |  |
Williston proved oil and gas assets (b) |  | $ | — |  |  | $ | — |  |  | $ | 615 |  |  | $ | 1,378 |  |  | $ | 763 |
(a) Amount represents net book value at date of assessment. (b) Williston assets sold in November 2015, classified as held for sale and written down to the sales price at September 30, 2015. FINANCIAL INSTRUMENTS FAIR VALUE The carrying amounts of cash and cash equivalents and other on-balance sheet financial instruments, other than fixed-rate debt, approximate fair value. See Note 5 for the fair value of Long-term Debt.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=73719730&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=73719730&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=73719730&loc=d3e13433-108611 + Details
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