Correspondence

This letter is in response to the January 24, 2012 telephone conversation with the Staff. We have updated our January 20, 2012 letter to include a reference to our quantitative assessment of economic similarity. In addition, we have updated our planned disclosure by including a codification reference to the characteristics of economic similarity. Please see underlined changes to our original January 20, 2012 letter beginning on page 5.

ASC 350-20-20 (formerly FAS 142 paragraph 30), defines a reporting unit as an operating segment or one level below an operating segment (referred to as a component). The Corporation concluded that the E&P segment is the reporting unit for purposes of testing goodwill for impairment, for the following reasons.

The E&P segment is managed globally by one segment manager on a value chain basis. Reporting to the segment manager are global value chain managers responsible for the following operating functions: Exploration, Developments, Production, Technology and Services (including drilling, supply chain management and environmental, health and safety). Financial and technical resources are allocated globally by the E&P segment manager and E&P operating results are reviewed at the E&P segment level. For these reasons, we have concluded that the E&P segment is the reporting unit. However, we have discrete financial information at the component level for tax, joint venture partner and statutory reporting requirements. As discussed with the Staff, even if components such as our financial reporting regions (United States, Europe, Africa and Asia) were considered to be reporting units, these components are economically similar and must be aggregated in accordance with the provisions of ASC 350-20-35.

Under the accounting guidance for determination of a reporting unit ASC 350-20-35, (formerly paragraph B111 of SFAS 142) the FASB concluded that components of an operating segment with similar economic characteristics should be aggregated. The FASB’s reasoning was that the benefits of goodwill are shared by components of an operating segment that have similar economic characteristics and that requiring goodwill to be allocated among components with similar economic characteristics would be both arbitrary and unnecessary for purposes of impairment testing.

In evaluating its goodwill, the Corporation determined that the major benefits of goodwill will be shared among all of the components of the E&P segment based on its global approach to managing and investing in its portfolio of assets. Since we last addressed this question with the Staff in 2003, the Corporation has further centralized its organizational structure so that the E&P segment leader manages the business globally on a value chain basis for the production and developments value chains. This is in addition to the other global functions that existed in 2003. Each value chain is responsible for the global deployment of staff and managing its costs. Investment opportunities are evaluated based on their contribution to global growth and profitability metrics. The Corporation’s regional financial reporting components share the resources of these global value chains.

ASC 350-20-35-35 (formerly SFAS 142) refers to ASC 280-10-50-11 (formerly SFAS 131) for guidance in determining whether components have similar economic characteristics. The Corporation believes that the components of its E&P segment have similar economic characteristics and are economically interdependent, as discussed below.

The Corporation considers oil and gas operations globally to have very similar characteristics. Produced hydrocarbons are commodities and market forces affect commodity pricing similarly in each of the Corporation’s components although temporary market conditions can cause short-term aberrations in geographic pricing relationships. In addition, there are slight variations in the grade of hydrocarbons produced which are equalized through price differentials quoted in various sources for the worldwide crude oil market.

Oil and gas are often produced from the same well from a single reservoir and are processed through the same infrastructure. A well is classified as an oil well or a gas well based on which product is dominant. Oil wells can produce gas and gas wells can produce oil. The Corporation prioritizes development of fields globally using the same rate of return threshold on investments for both oil and gas projects.

Both oil and gas are forms of energy. The energy content of oil and gas is measured in a common unit such as BTU’s. Often oil and gas are expressed in a common unit of production – with gas converted to a barrel of oil equivalent, generally based on energy content. For example, the SEC oil and gas disclosures stipulated by Regulation S-K require production cost per unit to be determined with oil or gas converted to a common unit of measure. This supports the view that the products are considered to be similar.

In short, crude oil and natural gas, while not identical, are similar forms of hydrocarbon energy. The fact that the total quantity of oil and gas reserves may vary by component is due to the maturity of, and the level of investment in, the component as opposed to any dissimilarities in the economic characteristics of developing oil and gas reserves.

The exploration for and the production of oil and gas are similar in each of the components of the E&P segment. The geological and geophysical sciences used to locate oil and gas are similar throughout the world. In addition, the processes used to develop oil and gas reserves are similar worldwide.

Both onshore and offshore fields exist in each of the components. Although onshore and offshore developments are not identical, the accounting standard being applied is one of “economic similarity.” The production processes for onshore and offshore operations possess a high degree of similarity as follows:

Customers of the E&P segment components are similar, as indicated in the following discussion. Crude oil is a commodity and is sold on the world market. The Corporation has a separate marketing department that sells the majority of the Corporation’s worldwide production. For each of the E&P segment components, the purchasers of crude oil are integrated oil companies, national oil companies and refiners.

In the United States and Europe, the majority of natural gas is sold in the spot market or under term contracts that are based on current market prices. In other areas, natural gas is sold principally through long-term contracts. Regardless of component, a natural gas sales contract commonly is negotiated as part of a production sharing contract or in advance of developing a field. This provides a market for the production, similar to the U.S. and Europe. When natural gas is discovered in these other areas, a field will not be developed (and reserves will not be recorded as proved) until there is a natural gas sales contract in place.

Furthermore, no gas project will be approved for development unless analysis shows its financial returns are likely to meet the Corporation’s rate of return criteria, regardless of region. In each component, natural gas is transported by pipeline to a local distribution company or end user, such as a power plant. Distribution companies are aggregators that resell natural gas to end users.

The methods used to distribute the Corporation’s crude oil and natural gas production are also similar in each component. Crude oil and natural gas are primarily transported via tanker or pipeline.

None of the E&P segment components is a “regulated” business such as banking, insurance or utilities. Generally, this factor is not applicable, except for adherence to contract terms under oil and gas leases, concessions and related permits. The Corporation’s standards for safety, environmental and other best operating practices are applied globally.

In ASC 350-20-55-7 (formerly Topic D-101), the FASB clarified its intentions with respect to the determination of whether the components of an operating segment have similar economic characteristics. In determining whether components should be combined into one reporting unit based on their economic similarities, the FASB Staff also outlined in this guidance other factors that should be considered, which include:

The E&P segment has one segment manager who is accountable to and maintains regular contact with the Chief Operating Decision Maker regarding the operating activities, financial results, forecasts and strategies for the E&P segment. Cash flows generated by the E&P segment are reinvested across all segment components. Investment opportunities from each component are ranked globally with the highest ranking exploration and development alternatives receiving the appropriate funding. As previously stated, the E&P segment is operated as one business based on the value chains within its operations. (i.e. Exploration, Developments, Production, Technology, and Services – Drilling, Supply Chain, and EH&S). This global approach to managing the E&P business further supports that components are economically similar across the E&P segment.

The Corporation believes E&P goodwill will be recovered from the operations of the segment as a whole and not from any one component or asset. The increased scope of the Corporation’s E&P presence resulting from past acquisitions has enabled it to identify and participate in new business opportunities and extend its operations into new strategic areas.

The E&P segment components are supported by E&P shared services organizations responsible for providing worldwide strategic planning, technical knowledge support (i.e. geologic, drilling, engineering and production), information technology, human resources, accounting, and legal services to the E&P segment. Investment capital moves from one component to another based on globally prioritized projects. In addition, the E&P segment manager is supported by global value chain managers, who actively participate in the management of the E&P segment as one seamless worldwide operation.

The Corporation has assembled a worldwide exploration team, responsible for (1) identifying new business opportunities in areas of strategic interest, and (2) highgrading the worldwide exploration portfolio. In addition, the components benefit from the research performed by the E&P global technology, drilling and reservoir engineering groups.

Based on the qualitative analysis above, the Corporation believes goodwill is expected to be recovered from the E&P segment and that aggregation of its E&P components is appropriate for purposes of testing goodwill for impairment.

In addition, we prepared a quantitative analysis to assess economic similarity of the components within the E&P segment using the guidance in ASC 280-10-55-7A to 7C. Although the E&P segment is managed on a global value chain basis, as discussed with the Staff, we performed the quantitative assessment for varying periods using the Corporation’s financial reporting regions and concluded that the components were economically similar, consistent with our assessment of the qualitative analysis.

Supplementally, we advise that we plan to expand our disclosure on the determination of the E&P segment as the reporting unit in the critical accounting policies section of the Corporation’s 2011 Form 10-K. Following is our proposed disclosure.

“Goodwill is tested for impairment annually in the fourth quarter or when events or circumstances indicate that the carrying amount of the goodwill may not be recoverable. The goodwill test is conducted at a reporting unit level, which is defined in accounting standards as an operating segment or one level below an operating segment. The reporting unit or units to be used in an evaluation and measurement of goodwill for impairment testing are determined from a number of factors, including the manner in which the business is managed. The Corporation has concluded that the E&P segment is the reporting unit for the purposes of testing goodwill for impairment, since the E&P segment is managed globally by one segment manager who allocates financial and technical resources globally and reviews operating results at the segment level. Accordingly, the Corporation expects that the benefits of goodwill will be recovered through the operations of that segment.

If any of the E&P segment components, such as our financial reporting regions (United States, Europe, Africa and Asia) were considered to be reporting units, an analysis would be performed to determine if these components were economically similar as defined in the provisions of ASC 350-20-35. If components are economically similar, that guidance requires that those components be aggregated and deemed a single reporting unit.

While the Corporation believes that the E&P segment is the reporting unit because of the manner in which the business is managed, it also evaluated the required aggregation criteria specified in ASC 280-10-50-11 and determined that its components are economically similar for the following reasons:

If the Corporation reorganized its exploration and production business such that there was more than one reporting unit, goodwill may be assigned to two or more reporting units.”

We would be happy to provide you with any additional information to assist you with your review. In addition, please do not hesitate to contact me at (212) 536-8230 with any questions.

Sincerely yours,

/s/ John P. Rielly

John P. Rielly

Senior Vice President and Chief Financial Officer