Asset Retirement Obligations

12 Months Ended

Dec. 31, 2013

Asset Retirement Obligation Disclosure [Abstract]

Note G – Asset Retirement Obligations

The asset retirement obligations liabilities (ARO) recognized by the Company at December 31, 2013 and 2012 are related to the estimated costs to dismantle and abandon its producing oil and gas properties and related equipment.

The Company has not recorded an ARO for its refining and marketing assets in the U.K. because sufficient information is presently not available to estimate a range of potential settlement dates for the obligation. These assets are held for sale at December 31, 2013. If these assets are not sold as anticipated, the ARO obligation will be initially recognized in the period in which sufficient information exists to estimate the liability.

A reconciliation of the beginning and ending aggregate carrying amount of the asset retirement obligation for 2013 and 2012 is shown in the following table.


(Thousands of dollars)	2013			2012
Balance at beginning of year	$	751,583			615,545
Accretion expense		48,996			39,341	¹
Liabilities incurred		172,048			184,439
Revision of previous estimates		(4,856	)		10,468
Liabilities settled		(51,647	)		(40,434	)
Liabilities assumed by Murphy USA Inc. upon separation		(15,401	)		0
U.K. oil and gas asset obligations reclassified to liabilities associated with assets held for sale in 2012		0			(64,355	)
Changes due to translation of foreign currencies		(20,720	)		6,579

Balance at end of year		880,003			751,583
Current portion of liability at end of year²		(27,515	)		(27,310	)

Noncurrent portion of liability at end of year	$	852,488			724,273

Includes $980 reclassified to discontinued operations associated with U.S. downstream operations.

Included in Other Accrued Liabilities on the Consolidated Balance Sheet.

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.