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Guarantees
12 Months Ended
Dec. 31, 2021
Guarantees [Abstract]  
Guarantees
Note 10—Guarantees
At December 31, 2021, we were liable for
 
certain contingent obligations
 
under various contractual arrangements
as described below.
 
We recognize a liability,
 
at inception, for the fair value
 
of our obligation as a guarantor
 
for
newly issued or modified guarantees.
 
Unless the carrying amount of the liability is noted below,
 
we have not
recognized a liability because the
 
fair value of the obligation
 
is immaterial.
 
In addition, unless otherwise stated, we
are not currently performing with any
 
significance under the guarantee and expect
 
future performance to be
either immaterial or have only a remote
 
chance of occurrence.
APLNG Guarantees
At December 31, 2021, we had outstanding
 
multiple guarantees in connection with our
37.5
 
percent ownership
interest in APLNG.
 
The following is a description of the guarantees
 
with values calculated utilizing December 2021
exchange rates:
During the third quarter of 2016, we issued a guarantee
 
to facilitate the withdrawal
 
of our pro-rata
portion of the funds in a project finance reserve account.
 
We estimate the remaining
 
term of this
guarantee to be
9
 
years.
 
Our maximum exposure under this guarantee
 
is approximately $
170
 
million and
may become payable if an enforcement
 
action is commenced by the project finance lenders
 
against
APLNG.
 
At December 31, 2021, the carrying value of this
 
guarantee is approximately
 
$
14
 
million.
In conjunction with our original purchase of an ownership
 
interest in APLNG from Origin Energy
 
in
October 2008, we agreed to reimburse
 
Origin Energy for our share of the existing
 
contingent liability
arising under guarantees of an existing
 
obligation of APLNG to deliver natural
 
gas under several sales
agreements.
 
The final guarantee expires
 
in the fourth quarter of 2041.
 
Our maximum potential liability
for future payments, or cost
 
of volume delivery, under
 
these guarantees is estimated
 
to be $
660
 
million
($
1.2
 
billion in the event of intentional
 
or reckless breach) and would become payable
 
if APLNG fails to
meet its obligations under these agreements
 
and the obligations cannot otherwise be mitigated.
 
Future
payments are considered unlikely,
 
as the payments, or cost of volume delivery,
 
would only be triggered if
APLNG does not have enough natural
 
gas to meet these sales commitments and
 
if the co-ventures do not
make necessary equity contributions
 
into APLNG.
We have guaranteed
 
the performance of APLNG with regard
 
to certain other contracts
 
executed in
connection with the project’s continued
 
development.
 
The guarantees have
 
remaining terms of
15 to 24
years
 
or the life of the venture.
 
Our maximum potential amount of future payments
 
related to these
guarantees is approximately
 
$
180
 
million and would become payable
 
if APLNG does not perform.
 
At
December 31, 2021, the carrying value of these guarantees
 
was approximately $
11
 
million.
Other Guarantees
We have other guarantees
 
with maximum future potential payment
 
amounts totaling approximately
 
$
720
 
million,
which consist primarily of guarantees
 
of the residual value of leased office buildings, guarantees
 
of the residual
value of corporate aircraft,
 
and a guarantee for our portion
 
of a joint venture’s
 
project finance reserve accounts.
 
These guarantees have remaining
 
terms of
one to five years
 
and would become payable if certain asset
 
values are
lower than guaranteed amounts
 
at the end of the lease or contract term, business
 
conditions decline at
guaranteed entities, or as a result
 
of nonperformance of contractual
 
terms by guaranteed parties.
 
At
 
December 31, 2021, the carrying value of these guarantees
 
was approximately $
8
 
million.
Indemnifications
Over the years, we have entered
 
into agreements to sell ownership
 
interests in certain legal
 
entities, joint ventures
and assets that gave rise to
 
qualifying indemnifications.
 
These agreements include indemnifications for
 
taxes and
environmental liabilities.
 
The carrying amount recorded for
 
these indemnifications at December 31, 2021, was
approximately $
20
 
million.
 
Those related to environmental
 
issues have terms that are generally
 
indefinite and the
maximum amounts
 
of future payments are generally
 
unlimited.
 
Although it is reasonably possible future
payments may exceed
 
amounts recorded, due to
 
the nature of the indemnifications, it is not possible to
 
make a
reasonable estimate of the maximum potential
 
amount of future payments.
for additional
information about environmental
 
liabilities.