Asset Retirement Obligations

12 Months Ended

Dec. 31, 2021

Asset Retirement Obligation Disclosure [Abstract]

Note H – Asset Retirement Obligations

The asset retirement obligations liabilities (ARO) recognized by the Company at December 31, 2021 and 2020 are related to the estimated costs to dismantle and abandon its producing oil and natural gas properties and related equipment.

A reconciliation of the beginning and ending aggregate carrying amount of the asset retirement obligation for 2021 and 2020 is shown in the following table.


(Thousands of dollars)	2021		2020
Balance at beginning of year	$	849,956	865,109
Accretion expense	46,613		42,136
Liabilities incurred	54,439		14,736

Revisions of previous estimates	48,737		(70,098)
Liabilities settled	(27,824)		(4,816)

Liabilities associated with assets held for sale	263		(21)
Changes due to translation of foreign currencies	(291)		2,910
Balance at end of year	971,893		849,956
Current portion of liability at end of year ¹	(132,117)		(33,648)
Noncurrent portion of liability at end of year	$	839,776	816,308

1 Included in Other accrued liabilities on the Consolidated Balance Sheets.

The estimation of future ARO is based on a number of assumptions requiring professional judgment. The Company cannot predict the type of revisions to these assumptions that may be required in future periods due to the availability of additional information such as: prices for oil field services, technological changes, governmental requirements and other factors.