2.2.0.7 false Investments, Loans and Long-Term Receivables 0206 - Disclosure - Investments, Loans and Long-Term Receivables true false false false 1 USD false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 Pure Standard http://www.xbrl.org/2003/instance pure xbrli 0 USDEPS Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 $ 2 Investments, Loans and Long-Term Receivables [Abstract] 0 cop_InvestmentsLoansAndLongTermReceivablesAbstract cop false na duration Investments, Loans and Long-Term Receivables. false false false false false true false false false false false false 1 false false false false 0 0 false false false xbrli:stringItemType string Investments, Loans and Long-Term Receivables. false 3 Investments, Loans and Long-Term Receivables 1 us-gaap_EquityMethodInvestmentsDisclosureTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false verboselabel false 1 false false false false 0 0   <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 20pt"><b>Note 6—Investments, Loans and Long-Term Receivables</b> </div> <div align="left" style="font-size: 10pt; margin-top: 10pt"><b>LUKOIL</b> </div> <div align="left" style="font-size: 10pt; margin-top: 0pt">Our ownership interest in LUKOIL was 19.21 percent at June 30, 2010, based on 851 million shares authorized and issued. Our average ownership interest in the first quarter of 2010, used to record our share of LUKOIL’s first-quarter results on a lag basis, was 20.09 percent. During the second quarter of 2010, we sold 6.7 million shares of LUKOIL, resulting in cash proceeds of $391 million and a net gain on disposition of $99 million, which is included in the “Other income” line of the consolidated income statement. </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">At June 30, 2010, the book value of our ordinary share investment in LUKOIL was $6,695 million reflecting the recognition of our equity-method share of LUKOIL’s earnings on a one-quarter-lag basis. Our investment book value is lower than our share of the net assets of LUKOIL by approximately $4,234 million. A majority of this negative basis difference is being amortized on a straight-line basis over a 22-year useful life as an increase to equity earnings. On June 30, 2010, the closing price of LUKOIL shares on the London Stock Exchange was $51.90 per share, making the total market value of our LUKOIL investment $8,479 million. For additional information about accounting for our LUKOIL investment, see Note 2—Changes in Accounting Principles. </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">On July 28, 2010, we announced our intention to sell our entire interest in LUKOIL, then consisting of 163,367,629 shares. This decision will be implemented as follows: </div> <div style="margin-top: 10pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="4%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>On July 28, 2010, we entered into a stock purchase and option agreement (the Agreement) with a wholly owned subsidiary of LUKOIL, pursuant to which such subsidiary will purchase 64,638,729 shares from us at a price of $53.25 per share, or $3.44 billion in total. Closing on this transaction is expected in the third quarter of 2010.</td> </tr> <tr> <td style="font-size: 0pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="4%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Also pursuant to the Agreement, the LUKOIL subsidiary has a 60-day option, expiring on September 26, 2010, to purchase any or all of our interest remaining at the time of exercise of the option, at a price of $56 per share.</td> </tr> <tr> <td style="font-size: 0pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="4%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Finally, to the extent all of our remaining interest is not purchased pursuant to the 60-day option, we intend to sell our remaining interest in the open market from time to time, subject to the terms of the Shareholder Agreement, by the end of 2011.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">We will continue to use the equity-method of accounting for our interest in LUKOIL until we determine we no longer have significant influence over the operating and financial policies of LUKOIL. Making this determination will involve judgment based on an on-going evaluation of current facts and circumstances, but based on the various voting rights and powers we have under our Shareholder Agreement with LUKOIL and the cumulative stockholder voting rules in Russia, we believe it is likely we would lose significant influence once our ownership interest falls below approximately 10 percent. At the point in the future when we cease using equity-method accounting, we would no longer record equity earnings related to LUKOIL, we would cease to report our share of LUKOIL’s upstream production and proved reserves in our supplemental oil and gas disclosures, and our available-for-sale investment in LUKOIL’s shares would be marked to market each period, with the corresponding gains and losses recorded to other comprehensive income until the shares are sold. </div> <div align="left" style="font-size: 10pt; margin-top: 10pt"><b>Loans to Related Parties</b> </div> <div align="left" style="font-size: 10pt; margin-top: 0pt">As part of our normal ongoing business operations and consistent with industry practice, we invest and enter into numerous agreements with other parties to pursue business opportunities, which share costs and apportion risks among the parties as governed by the agreements. Included in such activity are loans made to certain affiliated companies. Significant loans to affiliated companies at June 30, 2010, included the following: </div> <div style="margin-top: 10pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="4%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>$676 million in loan financing to Freeport LNG Development, L.P.</td> </tr> <tr> <td style="font-size: 0pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="4%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>$246 million in loan financing at June 2010 exchange rates to Varandey Terminal Company.</td> </tr> <tr> <td style="font-size: 0pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="4%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>$1,064 million in project financing and an additional $93 million of accrued interest to Qatargas 3.</td> </tr> <tr> <td style="font-size: 0pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="4%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>$550 million in loan financing to WRB Refining LLC.</td> </tr> </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 10pt">The long-term portion of these loans are included in the “Loans and advances—related parties” line on the consolidated balance sheet, while the short-term portion is in “Accounts and notes receivable—related parties.” </div> <div align="left" style="font-size: 10pt; margin-top: 10pt"><b>Other Investments</b> </div> <div align="left" style="font-size: 10pt; margin-top: 0pt">We have investments remeasured at fair value on a recurring basis to support certain nonqualified deferred compensation plans. The fair value of these assets at June 30, 2010, was $304 million, and substantially the entire value is categorized in Level 1 of the fair value hierarchy. These investments are measured at fair value using a market approach based on quotations from national securities exchanges. </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">Merey Sweeny, L.P. (MSLP) is a limited partnership that owns a 70,000 barrel-per-day delayed coker and related facilities at the Sweeny Refinery used to produce fuel-grade petroleum coke. Prior to August 28, 2009, MSLP was owned 50/50 by us and Petróleos de Venezuela S.A. (PDVSA). Under the agreements that govern the relationships between the partners, certain defaults by PDVSA with respect to supply of crude oil to the Sweeny Refinery gave us the right to acquire PDVSA’s 50 percent ownership interest in MSLP. On August 28, 2009, we exercised that right. PDVSA has initiated arbitration in the International Chamber of Commerce challenging our actions and this arbitration is underway. We continue to use the equity method of accounting for our investment in MSLP. </div> </div>  <!-- Begin Block Tagged Note false false false us-types:textBlockItemType textblock Equity investment disclosure, or group of investments for which combined disclosure is appropriate, including: (a) the name of each investee and percentage of ownership of common stock, (b) accounting policies for investments in common stock, (c) difference between the amount at which the investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference, (d) the total fair value of each identified investment for which a market value is available, (e) summarized information as to assets, liabilities, and results of operations of the investees (for investments in unconsolidated subsidiaries, common stock of joint ventures, or other investments using the equity method), and (f) material effects of possible conversions, exercises, or contingent issuances of the investee. Other disclosures include (a) the names of any investee in which the investor owns 20 percent or more of the voting stock and investment is not accounted for using the equity method, and the reasons why not, and (b) the names of any investee in which the investor owns less than 20% of the voting stock and the investment is accounted for using the equity method, and the reasons why it is. Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 18 -Paragraph 20 false 1 2 false UnKnown UnKnown UnKnown false true