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Income Taxes
 6 Months Ended
Jun. 30, 2012
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract]  
Income Taxes
INCOME TAXES
The income tax expense for the three and six months ended June 30, 2012 was $4 million and $40 million compared to a income tax benefit of $206 million and $230 million for the three and six months ended June 30, 2011. The following table summarizes the difference between income tax expense at the United States statutory rate of 35% and the income tax expense (benefit) at effective worldwide tax rates for the periods presented:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Millions of dollars
 
2012
 
2011
 
2012
 
2011
Earnings (loss) before income taxes
 
$
124

 
$
(370
)
 
$
257

 
$
(216
)
Income tax expense computed at United States statutory tax rate
 
$
43

 
$
(130
)
 
$
90

 
$
(75
)
U.S. government tax incentive - Energy Tax Credits
 
—

 
(79
)
 
—

 
(133
)
Valuation allowance release
 
(55
)
 
—

 
(55
)
 
—

Foreign government tax incentive - BEFIEX
 
(3
)
 
(28
)
 
(7
)
 
(39
)
Other
 
19

 
31

 
12

 
17

Income tax expense (benefit) computed at effective worldwide tax rates
 
$
4

 
$
(206
)
 
$
40

 
$
(230
)

Over the next twelve months it is reasonably possible that we will settle unrecognized tax benefits totaling approximately $63 million associated with certain tax examinations and other events.
At the end of each interim period, we make our best estimate of the effective tax rate expected to be applicable for the full fiscal year and the impact of discrete items, if any, and adjust the quarterly rate as necessary