ASSET RETIREMENT OBLIGATION

12 Months Ended

Dec. 31, 2020

Asset Retirement Obligation Disclosure [Abstract]

The following table describes changes to the Company’s asset retirement obligation (ARO) liability:


	For the Year Ended December 31,
	2020		2019
	(In millions)
Asset retirement obligation at beginning of year	$	1,858	$	1,932
Liabilities incurred	10		41

Liabilities divested	(26)		(56)
Liabilities settled	(30)		(56)
Accretion expense	109		107
Revisions in estimated liabilities	23		(110)

Asset retirement obligation at end of year	1,944		1,858
Less current portion	(56)		(47)
Asset retirement obligation, long-term	$	1,888	$	1,811

The ARO liability reflects the estimated present value of the amount of dismantlement, removal, site reclamation, and similar activities associated with Apache’s oil and gas properties and other long-lived assets. The Company utilizes current retirement costs to estimate the expected cash outflows for retirement obligations. The Company estimates the ultimate productive life of the properties, a risk-adjusted discount rate, and an inflation factor in order to determine the current present value of this obligation. To the extent future revisions to these assumptions impact the present value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property or other long-lived asset balance.

During 2020 and 2019, the Company recorded $10 million and $41 million, respectively, in abandonment liabilities resulting from Apache’s exploration and development capital program. Liabilities settled primarily relate to individual properties, platforms, and facilities plugged and abandoned during the period. During 2020, approximately $23 million net abandonment costs were revised upward to reflect changes in estimates of timing and costs, primarily in the North Sea. During 2019, approximately $110 million net abandonment costs were revised downward to reflect changes in estimates of timing and costs, primarily in the North Sea.