ASSET RETIREMENT OBLIGATION

12 Months Ended

Dec. 31, 2018

Asset Retirement Obligation Disclosure [Abstract]

The following table describes changes to the Company’s asset retirement obligation (ARO) liability for the years ended December 31, 2018 and 2017:



	2018			2017
	(In millions)
Asset retirement obligation at beginning of year	$	1,835		$	2,498
Liabilities incurred	51			58
Liabilities divested	—			(818		)
Liabilities settled	(52		)	(45		)
Accretion expense	108			130
Revisions in estimated liabilities	(10		)	12
Asset retirement obligation at end of year	1,932			1,835
Less current portion	(66		)	(43		)
Asset retirement obligation, long-term	$	1,866		$	1,792

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. 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 balance.

During 2018 and 2017, the Company recorded $51 million and $58 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 2018, approximately $10 million net abandonment costs were revised downward to reflect changes in estimates of timing and costs in the U.S. and North Sea. During 2017, approximately $12 million of abandonment costs were revised upward, primarily in the U.S.