Derivative and Financial Instruments	12 Months Ended
Derivative and Financial Instruments	Dec. 31, 2021
Derivative and Financial Instruments [Abstract]
Derivative and Financial Instruments	Note 12—Derivative and Financial Instruments We use futures, forwards, swaps and options in various markets to meet our customer needs, capture market opportunities, and manage foreign exchange currency risk. Commodity Derivative Instruments Our commodity business primarily consists of natural gas, crude oil, bitumen, LNG and NGLs. Commodity derivative instruments are held at fair value on our consolidated balance sheet. Where these balances have the right of setoff, they are presented on a net basis. Related cash flows are recorded as operating activities on our consolidated statement of cash flows. On our consolidated income statement, gains and losses are recognized either on a gross basis if directly related to our physical business or a net basis if held for trading. Gains and losses related to contracts that meet and are designated with the NPNS exception are recognized upon settlement. We generally apply this exception to eligible crude contracts and certain gas contracts. We do not apply hedge accounting for our commodity derivatives. The following table presents the gross fair values of our commodity derivatives, excluding collateral, and the line items where they appear on our consolidated balance sheet: Millions of Dollars 2021 2020 Assets Prepaid expenses and other current assets $ 1,168 229 Other assets 75 26 Liabilities Other accruals 1,160 202 Other liabilities and deferred credits 63 18 The gains (losses) from commodity derivatives incurred, and the line items where they appear on our consolidated income statement were: Millions of Dollars 2021 2020 2019 Sales and other operating revenues $ (228) 19 141 Other income (loss) 25 4 4 Purchased commodities 75 11 (118) On January 15, 2021, we assumed financial derivative instruments consisting of oil and natural gas swaps in connection with the acquisition of Concho. At the acquisition date, the financial derivative instruments acquired were recognized at fair value as a net liability of $ 456 million with settlement dates under the contracts through December 31, 2022. During 2021, we recognized a loss on settlement of the contracts for $ 305 million. This loss associated with the acquired financial instruments is recorded within the “Sales and other operating revenues” line on our consolidated income statement. In connection with the settlement, we issued a cash payment of $ 761 million during 2021. Cash settlements related to the derivative contracts are presented within “Cash Flows From Operating Activities” on our consolidated statement of cash flows. The table below summarizes our material net exposures resulting from outstanding commodity derivative contracts: Open Position Long/(Short) 2021 2020 Commodity Natural gas and power (billions of cubic feet equivalent) Fixed price 4 (20) Basis (22) (10) Foreign Currency Exchange Derivatives We have foreign currency exchange rate risk resulting from international operations. Our foreign currency exchange derivative activity primarily relates to managing our cash -related foreign currency exchange rate exposures, such as firm commitments for capital programs or local currency tax payments, dividends and cash returns from net investments in foreign affiliates, and investments in equity securities. Our foreign currency exchange derivative instruments are held at fair value on our consolidated balance sheet. Related cash flows are included within operating activities on our consolidated statement of cash flows. We do not elect hedge accounting on our foreign currency exchange derivatives. The following table presents the gross fair values of our foreign currency exchange derivatives, excluding collateral, and the line items where they appear on our consolidated balance sheet: Millions of Dollars 2021 2020 Assets Prepaid expenses and other current assets $ 28 2 Liabilities Other accruals 9 16 The (gains) losses from foreign currency exchange derivatives incurred and the line item where they appear on our consolidated income statement were: Millions of Dollars 2021 2020 2019 Foreign currency transaction (gains) losses $ (5) (40) 16 We had the following net notional position of outstanding foreign currency exchange derivatives: In Millions Notional Currency 2021 2020 Foreign Currency Exchange Derivatives Buy British pound, sell euro GBP 155 - Sell British pound, buy euro GBP - 5 Sell Canadian dollar, buy U.S. dollar CAD - 370 Buy Canadian dollar, sell U.S. dollar CAD 77 - Buy Australian dollar, sell U.S. dollar AUD 1,850 - At December 31, 2021, we had outstanding foreign currency exchange forward contracts to buy $1.9 billion AUD at $0.715 AUD against the U.S. dollar in anticipation of our future acquisition of an additional interest in APLNG. At December 31, 2020, we had outstanding foreign currency exchange forward contracts to sell $0.45 billion CAD at $0.748 CAD against the U.S. dollar . Financial Instruments We invest in financial instruments with maturities based on our cash forecasts for the various accounts and currency pools we manage. The types of financial instruments in which we currently invest include: ● Time deposits: Interest bearing deposits placed with financial institutions for a predetermined amount of time. ● Demand deposits: Interest bearing deposits placed with financial institutions. Deposited funds can be withdrawn without notice. ● Commercial paper: Unsecured promissory notes issued by a corporation, commercial bank or government agency purchased at a discount to mature at par. ● U.S. government or government agency obligations: Securities issued by the U.S. government or U.S. government agencies. ● Foreign government obligations: Securities issued by foreign governments. ● Corporate bonds: Unsecured debt securities issued by corporations. ● Asset-backed securities: Collateralized debt securities. The following investments are carried on our consolidated balance sheet at cost, plus accrued interest and the table reflects remaining maturities at December 31, 2021 and 2020: Millions of Dollars Carrying Amount Cash and Cash Equivalents Short-Term Investments Investments and Long- Term Receivables 2021 2020 2021 2020 2021 2020 Cash $ 670 597 Demand Deposits 1,554 1,133 Time Deposits 1 to 90 days 2,363 1,225 217 2,859 91 to 180 days 4 448 Within one year 4 13 One year through five years - 1 U.S. Government Obligations 1 to 90 days 431 23 - - $ 5,018 2,978 225 3,320 - 1 The following investments in debt securities classified as available for sale are carried at fair value on our consolidated balance sheet at December 31, 2021 and 2020: Millions of Dollars Carrying Amount Cash and Cash Equivalents Short-Term Investments Investments and Long- Term Receivables 2021 2020 2021 2020 2021 2020 Major Security Type Corporate Bonds $ 3 - 128 130 173 143 Commercial Paper 7 13 82 155 U.S. Government Obligations - - - 4 2 13 U.S. Government Agency Obligations 2 - 8 17 Foreign Government Obligations 7 - 2 2 Asset-backed Securities 2 - 63 41 $ 10 13 221 289 248 216 Cash and Cash Equivalents and Short-Term Investments have remaining maturities within one year. Investments and Long-Term Receivables have remaining maturities that vary from greater than one year through eight years. The following table summarizes the amortized cost basis and fair value of investments in debt securities classified as available for sale at December 31: Millions of Dollars Amortized Cost Basis Fair Value 2021 2020 2021 2020 Major Security Type Corporate Bonds $ 305 271 304 273 Commercial Paper 88 168 89 168 U.S. Government Obligations 2 17 2 17 U.S. Government Agency Obligations 10 17 10 17 Foreign Government Obligations 9 2 9 2 Asset-Backed Securities 65 41 65 41 $ 479 516 479 518 As of December 31, 2021 and 2020, total unrealized losses for debt securities classified as available for sale with net losses were negligible. Additionally, as of December 31, 2021 and 2020, investments in these debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded were negligible. For the years ended December 31, 2021 and 2020, proceeds from sales and redemptions of investments in debt securities classified as available for sale were $ 594 million and $ 422 million, respectively. Gross realized gains and losses included in earnings from those sales and redemptions were negligible. The cost of securities sold and redeemed is determined using the specific identification method. Credit Risk Financial instruments potentially exposed to concentrations of credit risk consist primarily of cash equivalents, short-term investments, long-term investments in debt securities, OTC derivative contracts and trade receivables. Our cash equivalents and short-term investments are placed in high-quality commercial paper, government money market funds, U.S. government and government agency obligations, time deposits with major international banks and financial institutions, high-quality corporate bonds, foreign government obligations and asset-backed securities. Our long-term investments in debt securities are placed in high-quality corporate bonds, asset-backed securities, U.S. government and government agency obligations, foreign government obligations, and time deposits with major international banks and financial institutions. The credit risk from our OTC derivative contracts, such as forwards, swaps and options, derives from the counterparty to the transaction. Individual counterparty exposure is managed within predetermined credit limits and includes the use of cash-call margins when appropriate, thereby reducing the risk of significant nonperformance. We also use futures, swaps and option contracts that have a negligible credit risk because these trades are cleared primarily with an exchange clearinghouse and subject to mandatory margin requirements until settled; however, we are exposed to the credit risk of those exchange brokers for receivables arising from daily margin cash calls, as well as for cash deposited to meet initial margin requirements. Our trade receivables result primarily from our petroleum operations and reflect a broad national and international customer base, which limits our exposure to concentrations of credit risk. The majority of these receivables have payment terms of 30 days or less , and we continually monitor this exposure and the creditworthiness of the counterparties. We may require collateral to limit the exposure to loss including, letters of credit, prepayments and surety bonds, as well as master netting arrangements to mitigate credit risk with counterparties that both buy from and sell to us, as these agreements permit the amounts owed by us or owed to others to be offset against amounts due to us. Certain of our derivative instruments contain provisions that require us to post collateral if the derivative exposure exceeds a threshold amount. We have contracts with fixed threshold amounts and other contracts with variable threshold amounts that are contingent on our credit rating. The variable threshold amounts typically decline for lower credit ratings, while both the variable and fixed threshold amounts typically revert to zero if we fall below investment grade. Cash is the primary collateral in all contracts; however, many also permit us to post letters of credit as collateral, such as transactions administered through the New York Mercantile Exchange. The aggregate fair value of all derivative instruments with such credit risk-related contingent features that were in a liability position on December 31, 2021 and December 31, 2020, was $ 281 million and $ 25 million, respectively. For these instruments, no collateral was posted as of December 31, 2021 or December 31, 2020. If our credit rating had been downgraded below investment grade on December 31, 2021, we would have been required to post $ 252 million of additional collateral, either with cash or letters of credit.