ASSET RETIREMENT OBLIGATION

12 Months Ended

Dec. 31, 2022

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, 2022 and 2021:


	For the Year Ended December 31,
	2022		2021

	(In millions)
Asset retirement obligation at beginning of the year	$	2,130	$	1,944
Liabilities incurred	4		3

Liabilities divested	(73)		(44)
Liabilities settled	(39)		(32)
Accretion expense	117		113
Revisions in estimated liabilities	(148)		146

Asset retirement obligation at end of the year	1,991		2,130
Less current portion	(55)		(41)
Asset retirement obligation, long-term	$	1,936	$	2,089

The ARO liability reflects the estimated present value of the amount of dismantlement, removal, site reclamation, and similar activities associated with the Company’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 2022 and 2021, the Company recorded $4 million and $3 million, respectively, in abandonment liabilities resulting from the Company’s exploration and development capital program. Liabilities settled primarily relate to individual properties, platforms, and facilities plugged and abandoned during the period. During 2022, net abandonment costs were revised downward approximately $148 million to reflect changes in estimates of timing, activity costs, and foreign currency exchange rates on service costs, primarily in the North Sea. This downward revision was partially offset by an upward revision in the U.S. During 2021, approximately $146 million net abandonment costs were revised upward to reflect changes in estimates of higher activity costs and long-term inflation assumptions, primarily in the U.S.