2021
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
OR
Commission file number:
(Exact name of registrant as specified in its charter)
(I.R.S. Employer identification No.)
,
,
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
-
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbols
Name of each exchange on which registered
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [x]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [ ] Yes
[x]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
[x]
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
[x]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit report.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). [ ] Yes
The aggregate market value of common stock held by non-affiliates of the registrant on June 30, 2021, the last business day of the
registrant’s most recently completed second fiscal quarter, based on the closing price on that date of $60.90, was $
The registrant had
Documents incorporated by reference:
Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held on May 10, 2022 (Part III)
Table of Contents
Page
Commonly Used Abbreviations
1
Item
Part I
1 and 2.
2
2
2
4
5
7
8
10
13
15
15
19
1A.
20
1B.
30
3.
30
4.
30
30
Part II
5.
32
6.
[Reserved]
7.
34
7A.
71
8.
74
9.
178
9A.
178
9B.
178
9C.
178
Part III
10.
179
11.
179
12.
179
13.
179
14.
179
Part IV
15.
180
186
Commonly Used Abbreviations
1
ConocoPhillips 2021 10-K
Commonly Used Abbreviations
The following industry-specific, accounting and other terms, and abbreviations may be commonly used in this
report.
Currencies
Accounting
$ or USD
U.S. dollar
ARO
asset retirement obligation
CAD
Canadian dollar
ASC
accounting standards codification
EUR
Euro
ASU
accounting standards update
GBP
British pound
DD&A
depreciation, depletion and
amortization
Units of Measurement
FASB
Financial Accounting Standards
BBL
barrel
Board
BCF
billion cubic feet
FIFO
first-in, first-out
BOE
barrels of oil equivalent
G&A
general and administrative
MBD
thousands of barrels per day
GAAP
generally accepted accounting
MCF
thousand cubic feet
principles
MBOD
thousand barrels of oil per day
LIFO
last-in, first-out
MM
million
NPNS
normal purchase normal sale
MMBOE
million barrels of oil equivalent
PP&E
properties, plants and equipment
MMBOD
million barrels of oil per day
VIE
variable interest entity
MBOED
thousands of barrels of oil
equivalent per day
MMBOED
millions of barrels of oil
Miscellaneous
equivalent per day
DE&I
diversity, equity and inclusion
MMBTU
million British thermal units
EPA
Environmental Protection Agency
MMCFD
million cubic feet per day
ESG
Environmental, Social and
Governance
EU
European Union
Industry
FERC
Federal Energy Regulatory
BLM
Bureau of Land Management
Commission
CBM
coalbed methane
GHG
greenhouse gas
E&P
exploration and production
HSE
health, safety and environment
CCUS
carbon capture utilization and
storage
ICC
International Chamber of
Commerce
FEED
front-end engineering and design
ICSID
World Bank’s International
FPS
floating production system
Centre for Settlement of
FPSO
floating production, storage and
Investment Disputes
offloading
IRS
Internal Revenue Service
G&G
geological and geophysical
OTC
over-the-counter
JOA
joint operating agreement
NYSE
New York Stock Exchange
LNG
liquefied natural gas
SEC
U.S. Securities and Exchange
NGLs
natural gas liquids
Commission
OPEC
Organization of Petroleum
TSR
total shareholder return
Exporting Countries
U.K.
United Kingdom
PSC
production sharing contract
U.S.
United States of America
PUDs
proved undeveloped reserves
VROC
variable return of cash
SAGD
steam-assisted gravity drainage
WCS
Western Canada Select
WTI
West Texas Intermediate
Business and Properties
ConocoPhillips 2021 10-K
Part I
Unless otherwise indicated, “the company,” “we,” “our,” “us” and “ConocoPhillips” are used in this report to refer
to the businesses of ConocoPhillips and its consolidated subsidiaries. Items 1 and 2—Business and Properties,
contain forward-looking statements including, without limitation, statements relating to our plans, strategies,
objectives, expectations and intentions that are made pursuant to the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995. The words
“anticipate,” “believe,” “budget,” “continue,” “could,” “effort,”
“estimate,” “expect,” “forecast,” “goal,” “guidance,” “intend,” “may,” “objective,” “outlook,” “plan,” “potential,”
“predict,” “projection,” “seek,” “should,” “target,” “will,” “would,”
statements. The company does not undertake to update, revise or correct any forward-looking information unless
required to do so under the federal securities laws. Readers are cautioned that such forward-looking statements
should be read in conjunction with the company’s disclosures under the headings “Risk Factors” beginning on page
20 and “CAUTIONARY STATEMENT FOR THE PURPOSES OF THE ‘SAFE HARBOR’ PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995,” beginning on pa
ge
Items 1 and 2. Business and Properties
Corporate Structure
ConocoPhillips is an independent E&P company headquartered in Houston, Texas with operations and activities in
14 countries. Our diverse, low cost of supply portfolio includes resource-rich unconventional plays in North
America; conventional assets in North America, Europe, and Asia; LNG developments; oil sands assets in Canada;
and an inventory of global conventional and unconventional exploration prospects. On December 31, 2021, we
employed approximately 9,900 people worldwide and had total assets of about $91 billion. Total company
production for the year was 1,567 MBOED.
ConocoPhillips was incorporated in the state of Delaware on November 16, 2001, in connection with, and in
anticipation of, the merger between Conoco Inc. and Phillips Petroleum Company. The merger between Conoco
and Phillips was consummated on August 30, 2002. In April 2012, ConocoPhillips completed the separation of the
downstream business into an independent, publicly traded energy company, Phillips 66.
On January 15, 2021, we completed the acquisition of Concho Resources Inc. (Concho), an independent oil and gas
exploration and production company with operations in New Mexico and West Texas focused on the Permian
Basin. For additional information related to this transaction,
On December 1, 2021, we completed our acquisition of Shell Enterprises LLC’s (Shell) assets in the Delaware Basin.
Assets acquired include approximately 225,000 net acres of producing properties located entirely in Texas. For
additional information related to this transaction,
Segment and Geographic Information
We manage our operations through six operating segments, defined by geographic region: Alaska; Lower 48;
Canada; Europe, Middle East and North Africa; Asia Pacific; and Other International. For operating segment and
geographic information,
We explore for, produce, transport and market crude oil, bitumen, natural gas, LNG and NGLs on a worldwide
basis. At December 31, 2021, our operations were producing in the U.S., Norway, Canada, Australia, Indonesia,
Malaysia, Libya, China and Qatar.
Business and Properties
3
ConocoPhillips 2021 10-K
The information listed below appears in the “Supplementary Data - Oil and Gas Operations” disclosures following
the Notes to Consolidated Financial Statements and is incorporated herein by reference:
●
Proved worldwide crude oil, NGLs, natural gas and bitumen reserves.
●
Net production of crude oil, NGLs, natural gas and bitumen.
●
Average sales prices of crude oil, NGLs, natural gas and bitumen.
●
Average production costs per BOE.
●
Net wells completed, wells in progress and productive wells.
●
Developed and undeveloped acreage.
The following table is a summary of the proved reserves information included in the “Supplementary Data - Oil and
Gas Operations” disclosures following the Notes to Consolidated Financial Statements. Approximately 86 percent
of our proved reserves are in countries that belong to the Organization for Economic Cooperation and
Development. Natural gas reserves are converted to BOE based on a 6:1 ratio: six MCF of natural gas converts to
one BOE. See Management’s Discussion and Analysis of Financial Condition and Results of Operations for a
discussion of factors that will enhance the understanding of the following summary reserves table.
Millions of Barrels of Oil Equivalent
Net Proved Reserves at December 31
2021
2020
2019
Crude oil
Consolidated operations
2,964
2,051
2,562
Equity affiliates
63
68
73
Total Crude Oil
3,027
2,119
2,635
Natural gas liquids
Consolidated operations
644
340
361
Equity affiliates
33
36
39
Total Natural Gas Liquids
677
376
400
Natural gas
Consolidated operations
1,523
1,011
1,209
Equity affiliates
617
621
736
Total Natural Gas
2,140
1,632
1,945
Bitumen
Consolidated operations
257
332
282
Total Bitumen
257
332
282
Total consolidated operations
5,388
3,734
4,414
Total equity affiliates
713
725
848
Total company
6,101
4,459
5,262
Business and Properties
ConocoPhillips 2021 10-K
Alaska
The Alaska segment primarily explores for, produces, transports and markets crude oil, natural gas and NGLs. We
are the largest crude oil producer in Alaska and have major ownership interests in two of North America’s largest
oil fields located on Alaska’s North Slope: Prudhoe Bay and Kuparuk. We also have a 100 percent interest in the
Alpine Field, located on the Western North Slope. Additionally, we are one of Alaska’s largest owners of state,
federal and fee exploration leases, with approximately 1.3 million net undeveloped acres at year -end 2021. Alaska
operations contributed 19 percent of our consolidated liquids production and 1 percent of our consolidated
natural gas production.
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Greater Prudhoe Area
36.1
%
Hilcorp
67
16
12
85
Greater Kuparuk Area
89.2-94.7
ConocoPhillips
73
-
2
73
Western North Slope
100.0
ConocoPhillips
38
-
2
39
Total Alaska
178
16
16
197
Greater Prudhoe Area
The Greater Prudhoe Area includes the Prudhoe Bay Field and five satellite fields, as well as the Greater Point
McIntyre Area fields. Prudhoe Bay, the largest conventional oil field in North America, is the site of a large
waterflood and enhanced oil recovery operation, supported by a large gas and water processing operation.
Prudhoe Bay’s western satellite fields are Aurora, Borealis, Polaris, Midnight Sun and Orion, while the Point
McIntyre, Niakuk, Raven, Lisburne and North Prudhoe Bay State fields are part of the Greater Point McIntyre Area.
Field installations include seven production facilities, two gas plants, two seawater plants and a central power
station.
In September 2021, rotary drilling commenced after 18 months of no drilling, resulting in four wells drilled and
brought online. To help offset decline, efforts were focused on increasing rate through well work, capacity
enhancements, less downtime, and NGL production.
Greater Kuparuk Area
We operate the Greater Kuparuk Area, which consists of the Kuparuk Field and four satellite fields: Tarn, Tabasco,
Meltwater and West Sak. Kuparuk is located 40 miles west of the Prudhoe Bay Field. Field installations include
three central production facilities which separate oil, natural gas and water, as well as a seawater treatment plant.
Development drilling at Kuparuk consists of rotary-drilled wells and horizontal multi-laterals from existing well
bores utilizing coiled-tubing drilling.
We operated a coiled-tubi ng drilling rig in the fourth quarter of 2021, resulting in five operated wells drilled and
brought online.
Western North Slope
On the Western North Slope, we operate the Colville River Unit, which includes the Alpine Field and three satellite
fields: Nanuq, Fiord and Qannik. The Alpine Field is located 34 miles west of the Kuparuk Field. Field installations
include one central production facility which separates oil, natural gas and water.
The Greater Mooses Tooth Unit is the first unit established entirely within the National Petroleum Reserve Alaska
(NPR-A). In 2017, we began construction in the unit with two drill sites: Greater Mooses Tooth #1 (GMT-1) and
Greater Mooses Tooth #2 (GMT-2). GMT-1 achieved first oil in 2018 and completed drilling in 2019. In 2021, the
third and final construction season for GMT-2 was successfully completed, and drilling operations commenced
during the second quarter. First oil for GMT-2 was achieved in the fourth quarter of 2021, as planned.
During 2021, we operated a conventional rotary rig and an extended reach drilling rig in the Western North Slope,
resulting in seven operated wells drilled and brought online.
Business and Properties
5
ConocoPhillips 2021 10-K
Exploration
Appraisal of the Willow Discovery, located 36 miles from Nuiqsut in the Bear Tooth Unit in the NPR-A, was
conducted in 2020. There was no appraisal activity in 2021. In August 2021, an Alaska federal judge vacated the
U.S. government’s approval granted to our planned Willow project previously approved by the BLM in October
2020. The Department of Justice did not appeal the decision and neither did we. We are actively supporting the
BLM and Department of Interior as they conduct the Supplemental Environmental Impact Statement process to
address issues highlighted by the federal district court. In the interim, we are continuing with FEED work in service
of a final investment decision.
The Stony Hill 1 well located to the east of the Greater Mooses Tooth Unit within the NPR-A was plugged and
abandoned in 2021 and expensed as a dry hole.
A 3D seismic survey covering 234 square miles was completed in 2020 on state and federal lands. We are currently
evaluating this seismic data for future exploration opportunities.
In late 2021, the Coyote Brookian topset exploration prospect in the Kuparuk River Unit was tested with a near
vertical sidetrack from an existing wellbore. The well was fracture stimulated and will undergo well testing early in
2022 to confirm longer term deliverability.
Transportation
We transport the petroleum liquids produced on the North Slope to Valdez, Alaska through an 800-mile pipeline
that is part of Trans -Alaska Pipeline System (TAPS). We have a 29.5 percent ownership interest in TAPS, and we
also have ownership interests in and operate the Alpine, Kuparuk and Oliktok pipelines on the North Slope.
Our wholly owned subsidiary, Polar Tankers, Inc., manages the marine transportation of our North Slope
production, using five company-owned, double -hulled tankers, and charters third-party vessels, as necessary. The
tankers deliver oil from Valdez, Alaska, primarily to refineries on the west coast of the U.S.
Lower 48
The Lower 48 segment consists of operations located in the 48 contiguous U.S. states and the Gulf of Mexico. The
segment is organized into the Permian and Gulf Coast and Rockies business units with a portfolio of low cost of
supply, short cycle time, resource-rich unconventional plays, and conventional production from legacy assets.
Based on 2021 production volumes, the Lower 48 is the company’s largest segment and contributed 55 percent of
our consolidated liquids production and 64 percent of our consolidated natural gas production.
In 2021, we completed two acquisitions significantly increasing our Permian position in the Lower 48. On January
15, 2021, we completed the acquisition of Concho adding complementary acreage across the Delaware and
Midland basins. On December 1, 2021, we completed the acquisition of Shell’s Delaware Basin position adding
significant Texas acreage in the Delaware Basin. The accounting close date used for reporting purposes of the Shell
transaction was December 31, 2021. For additional information related to these acquisitions,
Business and Properties
ConocoPhillips 2021 10-K
2021
Crude Oil
NGL
Natural Gas
Total
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Delaware Basin
162
27
584
286
Midland Basin
89
9
229
136
Permian—Other
11
2
40
20
262
38
853
442
Eagle Ford
116
53
251
211
Bakken
59
16
117
94
Gulf Coast and Rockies—Other
10
3
119
33
185
72
487
338
Total Lower 48
447
110
1,340
780
At December 31, 2021, we held 10.8 million net acres of onshore conventional and unconventional acreage in the
Lower 48, the majority of which is either held by production or owned by the company. Our unconventional
holdings total approximately 2 million net acres in the following areas:
●
560,000 net acres in the Bakken, located in North Dakota and eastern Montana.
●
200,000 net acres in the Eagle Ford, located in South Texas.
●
654,000 net acres in the Permian—Delaware Basin, located in West Texas and southeastern New Mexico.
●
266,000 net acres in the Permian—Midland Basin, located in West Texas.
●
293,000 net acres in other areas with unconventional potential.
The majority of our 2021 onshore production activities were centered on continued development of assets, with
an emphasis on areas with low cost of supply, particularly in growing unconventional plays. Our major focus in
2021 included the following areas:
●
Delaware Basin—We operated six rigs and two frac crews on average during 2021, resulting in 92
operated wells drilled and 95 operated wells brought online. Primarily as a result of our Concho
acquisition, production increased in 2021 compared with 2020, averaging 286 MBOED and 79 MBOED,
respectively.
●
Midland Basin—We operated five rigs and two frac crews on average during 2021, resulting in 118
operated wells drilled and 102 operated wells brought online. Primarily as a result of our Concho
acquisition, production increased in 2021 compared with 2020, averaging 136 MBOED and 6 MBOED,
respectively.
●
Eagle Ford—We operated four rigs and two frac crews on average in the Eagle Ford during 2021, resulting
in 93 operated wells drilled and 160 operated wells brought online. Production increased in 2021
compared with 2020, averaging 211 MBOED and 186 MBOED, respectively.
●
Bakken—We operated one rig and one frac crew for parts of the year in the Bakken, resulting in 6
operated wells drilled and 21 operated wells brought online. Production increased in 2021 compared
with 2020, averaging 94 MBOED and 78 MBOED, respectively.
Dispositions
In the second half of 2021, we completed the sale of certain noncore assets in the Lower 48. In January 2022, we
entered into an agreement to sell our interests in additional noncore assets in the Lower 48. This transaction is
expected to close in the second quarter of 2022.
Facilities
We operate and own, with varying interests, centralized condensate processing facilities in Texas and New Mexico
in support of our Eagle Ford, Delaware and Midland assets.
Business and Properties
7
ConocoPhillips 2021 10-K
Canada
Our Canadian operations consist of the Surmont oil sands development in Alberta and the liquids-rich Montney
unconventional play in British Columbia. In 2021, operations in Canada contributed 8 percent of our consolidated
liquids production and 4 percent of our consolidated natural gas production.
2021
Crude Oil
NGL
Natural Gas
Bitumen
Total
Interest
Operator
MBD
MBD
MMCFD
MBD
MBOED
Average Daily Net
Production
Surmont
50.0
%
ConocoPhillips
-
-
-
69
69
Montney
100.0
ConocoPhillips
8
4
80
-
25
Total Canada
8
4
80
69
94
Surmont
Our bitumen resources in Canada are produced via an enhanced thermal oil recovery method called SAGD,
whereby steam is injected into the reservoir, effectively liquefying the heavy bitumen, which is recovered and
pumped to the surface for further processing. Operations include two central processing facilities for treatment
and blending of bitumen. At December 31, 2021, we held approximately 600,000 net acres of land in the
Athabasca Region of northeastern Alberta.
The Surmont oil sands leases are located approximately 35 miles south of Fort McMurray, Alberta. Surmont is a
50/50 joint venture with Total Energies SE that offers long-lived, sustained production. We are focused on
structurally lowering costs, reducing GHG intensity and optimizing asset performance.
In 2021, we began processing a portion of Surmont’s blended bitumen at the Diluent Recovery Unit constructed in
Alberta, unlocking additional value for the asset by providing market access to our heavy crude oil.
In 2019, Surmont implemented the use of condensate for bitumen blending through the central processing facility
2; enabling the asset to lower blend ratio and diluent supply costs, gain protection from synthetic crude oil supply
disruptions and gain optionality on sales products. The alternative blend project was complete in October at
central processing facility 1. Full Surmont Heavy Dilbit (condensate bitumen blend) was produced across both
facilities in the fourth quarter of 2021.
Montney
The Montney is an unconventional resource play located in northeastern British Columbia. At December 31, 2021,
we held approximately 300,000 acres of land with 100 percent working interest in the liquids-rich section of the
Montney.
In 2021, development activity consisted of drilling three horizontal wells and bringing 12 wells online. In addition,
construction on the second phase of our processing facility started.
Exploration
Our primary exploration focus is assessing our Montney acreage. In 2022, appraisal drilling and completions
activity within the Montney will continue to explore the area’s resource potential. Additionally, we have
exploration acreage in the Mackenzie Delta/Beaufort Sea Region and the Arctic Islands.
Business and Properties
ConocoPhillips 2021 10-K
Europe, Middle East and North Africa
The Europe, Middle East and North Africa segment consists of operations principally located in the Norwegian
sector of the North Sea; the Norwegian Sea; Qatar; Libya; and terminalling operations in the U.K. In 2021,
operations in Europe, Middle East and North Africa contributed 12 percent of our consolidated liquids production
and 14 percent of our consolidated natural gas production.
Norway
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Greater Ekofisk Area
30.7-35.1
%
ConocoPhillips
49
2
41
58
Heidrun
24.0
Equinor
13
1
35
20
Aasta Hansteen
10.0
Equinor
-
-
84
14
Alvheim
20.0
Aker BP
9
-
13
11
Troll
1.6
Equinor
2
-
58
11
Visund
9.1
Equinor
2
1
46
11
Other
Various
Equinor
6
-
21
10
Total Norway
81
4
298
135
The Greater Ekofisk Area is located approximately 200 miles offshore Stavanger, Norway, in the North Sea, and
comprises four producing fields: Ekofisk, Eldfisk, Embla and Tor. The Tor II redevelopment achieved first
production in December 2020. This project consisted of 8 wells that have all been completed and brought online
as of May 2021. Crude oil is exported to Teesside, England, and the natural gas is exported to Emden, Germany.
The Ekofisk and Eldfisk fields consist of several production platforms and facilities, with development drilling
continuing over the coming years.
The Heidrun Field is located in the Norwegian Sea. Produced crude oil is stored in a floating storage unit and
exported via shuttle tankers. Part of the natural gas is currently injected into the reservoir for optimization of
crude oil production, some gas is transported for use as feedstock in a methanol plant in Norway, in which we own
an 18 percent interest, and the remainder is transported to Europe via gas processing terminals in Norway.
Aasta Hansteen is a gas and condensate field located in the Norwegian Sea. Produced condensate is loaded onto
shuttle tankers and transported to market. Gas is transported through the Polarled gas pipeline to the onshore
Nyhamna processing plant for final processing prior to export to market.
The Troll Field lies in the northern part of the North Sea and consists of the Troll A, B and C platforms. The natural
gas from Troll A is transported to Kollsnes, Norway. Crude oil from floating platforms Troll B and Troll C is
transported to Mongstad, Norway, for storage and export.
The Alvheim Field is located in the northern part of the North Sea near the border with the U.K. sector, and
consists of a FPSO vessel and subsea installations. Produced crude oil is exported via shuttle tankers, and natural
gas is transported to the Scottish Area Gas Evacuation (SAGE) Terminal at St. Fergus, Scotland, through the SAGE
Pipeline.
Visund is an oil and gas field located in the North Sea and consists of a floating drilling, production and processing
unit, and subsea installations. Crude
oil is transported by pipeline to a nearby third-party field for storage and
export via tankers. The natural gas is transported to a gas processing plant at Kollsnes, Norway, through the
Gassled transportation system.
We also have varying ownership interests in two other producing fields in the Norway sector of the North Sea.
Business and Properties
9
ConocoPhillips 2021 10-K
Exploration
In 2021, we prepared for a four well exploration and appraisal campaign to take place in 2022. Planned wells
include Slagugle appraisal and exploration of the Peder, Bounty and Lamba prospects.
We were awarded two new exploration licenses; PL1122 and PL1123; and two acreage additions, PL891B and
PL1045B.
Transportation
We own a 35.1 percent interest in the Norpipe Oil Pipeline System, a 220-mile pipeline which carries crude oil from
Ekofisk to a crude oil stabilization and NGLs processing facility in Teesside, England.
Facilities
We operate and have a 40.25 percent ownership interest in a crude oil stabilization and NGLs processing facility at
Teesside, England to support our Norway operations.
Qatar
2021
Crude Oil
NGL
Natural
Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Qatargas Operating
QG3
30.0
%
Company Limited
13
8
373
83
QG3 is an integrated development jointly owned by QatarEnergy (68.5 percent), ConocoPhillips (30 percent) and
Mitsui & Co., Ltd. (1.5 percent). QG3 consists of upstream natural gas production facilities, which produce
approximately 1.4 billion gross cubic feet per day of natural gas from Qatar’s North Field over a 25-year life, in
addition to a 7.8 million gross tonnes-per-year LNG facility. LNG is shipped in leased LNG carriers destined for sale
globally.
QG3 executed the development of the onshore and offshore assets as a single integrated development with
Qatargas 4 (QG4), a joint venture between QatarEnergy and Shell plc. This included the joint development of
offshore facilities situated in a common offshore block in the North Field, as well as the construction of two
identical LNG process trains and associated gas treating facilities for both the QG3 and QG4 joint ventures.
Production from the LNG trains and associated facilities is combined and shared.
Libya
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Waha Concession
16.3
%
Waha Oil Co.
37
-
15
40
The Waha Concession consists of multiple concessions and encompasses nearly 13 million gross acres in the Sirte
Basin. In 2021, we had 22 crude liftings from Es Sider, compared with five crude liftings from Es Sider in 2020,
primarily due to the absence of a forced shutdown after a period of civil unrest that ceased production in 2020.
Business and Properties
ConocoPhillips 2021 10-K
Asia Pacific
The Asia Pacific segment has exploration and production operations in China, Indonesia, Malaysia and Australia . In
2021, operations in the Asia Pacific segment contributed 6 percent of our consolidated liquids production and 17
percent of our consolidated natural gas production.
Australia
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
ConocoPhillips/
Australia Pacific LNG
37.5
%
Origin Energy
-
-
680
113
Australia Pacific LNG Pty Ltd (APLNG), our joint venture with Origin Energy Limited (37.5 percent) and China
Petrochemical Corporation (Sinopec) (25 percent), is focused on producing CBM from the Bowen and Surat basins
in Queensland, Australia, to supply the domestic gas market and convert the CBM into LNG for export. Origin
operates APLNG’s upstream production and pipeline system, and we operate the downstream LNG facility, located
on Curtis Island near Gladstone, Queensland, as well as the LNG export sales business.
We operate two fully subscribed 4.5-million-metric-tonnes-per-year LNG trains. Approximately 2,800 net wells are
ultimately expected to supply both the LNG sales contracts and domestic gas market. The wells are supported by
gathering systems, central gas processing and compression stations, water treatment facilities and an export
pipeline connecting the gas fields to the LNG facilities. The LNG is being sold to Sinopec under 20-year sales
agreements for 7.6 million metric tonnes of LNG per year, and Japan-based Kansai Electric Power Co., Inc. under a
20-year sales agreement for approximately 1 million metric tonnes of LNG per year.
In December 2021, the company announced it has notified Origin Energy that it is exercising its preemption right to
purchase an additional 10 percent shareholding interest in APLNG from Origin Energy for $1.645 billion, which will
be funded from cash on the balance sheet and subject to customary adjustments. The effective date of the
transaction is July 1, 2020 with closing anticipated to occur in the first quarter of 2022 subject to Australian
government approval. There will be no change to the operational structure of the APLNG joint venture, whereby
Origin Energy will remain the upstream operator of the natural gas production and pipeline system, and
ConocoPhillips Australia will remain the downstream operator of the LNG facility.
For additional information,
Exploration
In 2019, we entered into an agreement with 3D Oil to acquire a 75 percent interest in and operatorship of an
offshore Exploration Permit (T/49P) located in the Otway Basin, Australia. We obtained an additional five percent
interest, increasing our interes t to 80 percent, in June 2020. A 3D seismic survey acquisition was completed in
October 2021, and this data will be evaluated for future exploration opportunities.
Indonesia
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
South Sumatra
54
%
ConocoPhillips
2
-
294
51
During 2021, we operated two PSCs in Indonesia: the Corridor Block located in South Sumatra, and Kualakurun in
Central Kalimantan. Currently, we have production from the Corridor Block.
Business and Properties
11
ConocoPhillips 2021 10-K
Asset Sales
In December 2021, we announced an agreement to sell our subsidiary that indirectly owns the company’s 54
percent interest in the Indonesia Corridor Block PSC and a 35 percent shareholding interest in the Transasia
Pipeline Company. The effective date for the transaction is January 1, 2021, with closing planned for the first
quarter of 2022.
South Sumatra
The Corridor PSC consists of two oil fields and seven producing natural gas fields. Natural gas is supplied from the
Grissik and Suban gas processing plants to the Duri steamflood in central Sumatra and to markets in Singapore,
Batam and West Java. In 2019, we were awarded a 20-year extension, with new terms, of the Corridor PSC. Under
these terms, we retain a majority interest and continue as operator for at least three years after 2023 and retain a
participating interest until 2043.
Exploration
We entered into the Central Kalimantan Kualakurun Block PSC in 2015 with an exploration period of six years. We
completed the firm working commitment program in 2017, which included satellite mapping and a 740-kilometer
2D seismic acquisition program. After completion of prospect evaluation, both PSC contractors decided to
relinquish rights and return this block to the government. The relinquishment was approved by the government in
August 2021.
Transportation
We are a 35 percent owner of a consortium company that has a 40 percent ownership in PT Transportasi Gas
Indonesia, which owns and operates the Grissik to Duri and Grissik to Singapore natural gas pipelines.
China
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Penglai
49.0
%
CNOOC
28
-
-
28
Penglai
The Penglai 19-3, 19-9 and 25-6 fields are located in the Bohai Bay Block 11/05 and are in various stages of
development. Phase 1 and 2 include production from all three Penglai oil fields.
The Phase 3 Project in the Penglai 19-3 and 19-9 fields consists of three new wellhead platforms and a central
processing platform. First production from Phase 3 was achieved in 2018. This project could include up to 186
wells, 126 of which have been completed and brought online as of December 2021.
The Phase 4A Project in the Penglai 25-6 field consists of one new wellhead platform and achieved first production
in 2020. This project could include up to 62 new wells, 14 of which have been completed and brought online as of
December 2021.
On April 5, 2021, a fire occurred on the non-operated V platform in the Bohai Bay. On April 6, 2021, the fire was
extinguished. We worked with the operator and implemented a recovery plan resulting in production resumption
in December 2021.
Exploration
During 2021, exploration activities in the Penglai fields consisted of two successful appraisal wells supporting
future developments in the Bohai Bay Block 11/05.
Business and Properties
ConocoPhillips 2021 10-K
Malaysia
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Gumusut
29.5
%
Shell
19
-
-
19
Malikai
35.0
Shell
13
-
-
13
Kebabangan (KBB)
30.0
KPOC
2
-
66
13
Siakap North-Petai
21.0
PTTEP
1
-
-
1
Total Malaysia
35
-
66
46
We have varying stages of exploration, development and production activities across approx imately 2.7 million net
acres in Malaysia, with working interests in six PSCs. Four of these PSCs are located in waters off the eastern
Malaysian state of Sabah: Block G, Block J, the Kebabangan Cluster (KBBC), which we do not operate, and Block
SB405, an operated exploration block acquired in 2021. We also operate another two exploration blocks, Block
WL4-00 and Block SK304, in waters off the eastern Malaysian state of Sarawak.
Block J
Gumusut
We currently have a 29.5 percent working interest in the unitized Gumusut Field. Gumusut Phase 2 first oil was
achieved in 2019. Development drilling associated with Gumusut Phase 3, a four-well program, is planned to
commence in the first quarter of 2022. First oil is anticipated in 2022.
KBBC
The KBBC PSC grants us a 30 percent working interest in the KBB, Kamunsu East and Kamunsu East Upthrown
Canyon gas and condensate fields. In 2020, we recognized dry hole expense and impaired the associated carrying
value of unproved properties in the Kamunsu East Field that is no longer in our development plans.
KBB
During 2019, KBB tied-in to a nearby third-party floating LNG vessel which provided increased gas offtake capacity.
Production from the field has been reduced since Janu ary 2020, due to the rupture of a third-party pipeline which
carries gas production from KBB to one of its markets. The pipeline operator has initiated repairs and is working
toward pipeline testing during 2022.
Block G
Malikai
We hold a 35 percent working interest in Malikai. This field achieved first production in December 2016 via the
Malikai Tension Leg Platform, ramping to peak production in 2018. The KMU-1 exploration well was completed
and started producing through the Malikai platform in 2018. Malikai Phase 2 development first oil was achieved in
February 2021.
Siakap North-Petai
We hold a 21 percent working interest in the unitized Siakap North-Petai (SNP) oil field. First oil from SNP Phase 2
was achieved in November 2021.
Exploration
In 2017, we were awarded operatorship and a 50 percent working interest in Block WL4-00, which included the
existing Salam-1 oil discovery and encompassed 0.6 million gross acres. In 2018 and 2019, two exploration and
two appraisal wells were drilled, resulting in oil discoveries under evaluation at Salam and Benum, while two
Patawali wells were expensed as dry holes in 2019. Further exploration and appraisal drilling is planned for 2022.
In 2018, we were awarded a 50 percent working interest and operatorship of Block SK304 encompassing 2.1
million gross acres off the coast of Sarawak, offshore Malaysia. We acquired 3D seismic over the acreage and
completed processing of this data in 2019. Exploration drilling is planned for 2022.
Business and Properties
13
ConocoPhillips 2021 10-K
In February 2021, we were awarded operatorship and an 85 percent working interest in Block SB405 encompassing
1.4 million gross acres off the coast of Sabah, offshore Malaysia. Acquisition of a 3D seismic survey over the
acreage is planned for 2022.
Other International
The Other International segment includes activities in Colombia as well as contingencies associated with prior
operations in other countries. As a result of our completed Concho acquisition on January 15, 2021, we refocused
our exploration program and announced our intent to pursue a managed exit from certain areas.
Colombia
We have an 80 percent operated interest in the Middle Magdalena Basin Block VMM-3 extending over
approximately 67,000 net acres. In addition, we have an 80 percent working interest in the VMM-2 Block which
extends over approximately 58,000 net acres and is contiguous to the VMM-3 Block. The blocks are currently in
Force Majeure following a preliminary injunction temporarily suspending hydraulic fracturing activities.
Argentina
On September 16, 2021, ConocoPhillips Petroleum Holdings BV signed and closed the sale of shares in
ConocoPhillips Argentina Holdings Sarl and ConocoPhillips Argentina Ventures SRL. With this transaction, we
completed the exit from our Argentina holdings.
Venezuela
For discussion of our contingencies in Venezuela,
Other
Marketing Activities
Our Commercial organization manages our worldwide commodity portfolio, which mainly includes natural gas,
crude oil, bitumen, NGLs and LNG. Marketing activities are performed through offices in the U.S., Canada, Europe
and Asia. In marketing our production, we attempt to minimize flow disruptions, maximize realized prices and
manage credit-risk exposure. Commodity sales are generally made at prevailing market prices at the time of sale.
We also purchase and sell third -party volumes to better position the company to satisfy customer demand while
fully utilizing transportation and storage capacity.
Natural Gas
Our natural gas production, along with third-party purchased gas, is primarily marketed in the U.S., Canada and
Europe. Our natural gas is sold to a diverse client portfolio which includes local distribution companies; gas and
power utilities; large industrials; independent, integrated or state -owned oil and gas companies; as well as
marketing companies. To reduce our market exposure and credit risk, we also transport natural gas via firm and
interruptible transportation agreements to major market hubs.
Crude Oil, Bitumen and Natural Gas Liquids
Our crude oil, bitumen and NGL revenues are derived from production in the U.S., Canada, Asia, Africa and Europe.
These commodities are primarily sold under contracts with prices based on market indices, adjusted for location,
quality and transportation.
LNG
LNG marketing efforts are focused on equity LNG production facilities located in Australia and Qatar. LNG is
primarily sold under long-term contracts with prices based on market indices.
Business and Properties
ConocoPhillips 2021 10-K
Energy Partnerships
Marine Well Containment Company (MWCC)
We are a founding member of the MWCC, a non-profit organization formed in 2010, which provides well
containment equipment and technology in the deepwater U.S. Gulf of Mexico. MWCC’s containment system
meets the U.S. Bureau of Safety and Environmental Enforcement requirements for a subsea well containment
system that can respond to a deepwater well control incident in the U.S. Gulf of Mexico.
Oil Spill Response Limited (OSRL) - Subsea Well Intervention Service (SWIS)
OSRL-SWIS is a non-profit organization in the U.K. that is an industry funded joint initiative providing the capability
to respond to subsea well-control incidents. Through our SWIS subscription, ConocoPhillips has access to
equipment that is maintained and stored in a response ready state. This provides well capping and containment
capability outside the U.S.
Oil Spill Response Removal Organizations (OSROs)
We maintain memberships in several OSROs across the globe as a key element of our preparedness program in
addition to internal response resources. Many of the OSROs are not-for-profit cooperatives owned by the member
companies wherein we may actively participate as a member of the board of directors, steering committee, work
group or other supporting role. In North America, our primary OSROs include the Marine Spill Response
Corporation for the continental U.S. and Alaska Clean Seas and Ship Escort/Response Vessel System for the Alaska
North Slope and Prince William Sound, respectively. Internationally, we maintain memberships in various OSROs
including Oil Spill Response Limited, the Norwegian Clean Seas Association for Operating Companies, Australian
Marine Oil Spill Center and Petroleum Industry of Malaysia Mutual Aid Group.
Technology
We have several technology programs that improve our ability to develop unconventional reservoirs, increase
recoveries from our legacy fields, improve the efficiency of our exploration program, produce heavy oil
economically with less emissions and implement sustainability measures.
In early 2021, we established a multi-disciplinary Low Carbon Technologi es organization to support the company’s
net-zero road map for scope 1 and 2 emissions, understand the new energies landscape, and prioritize
opportunities for future competitive investment. Throughout 2021, we executed emissions reduction projects
across our global portfolio including production efficiency measures and methane and flaring reductions. We also
completed pre-development work to evaluate large scale wind energy opportunities to power our operations in
the Permian, North Sea and Bohai Bay. Within the new energies landscape, the company has prioritized
opportunities in CCUS and hydrogen. In 2021, CO2 storage sites were evaluated along the Texas and Louisiana
Gulf Coast and we initiated activities to provide carbon capture and storage to industrial emitters. 2021 also saw
early investments in enabling hydrogen technologies and we began evaluating hydrogen opportunities in both
domestic and international markets .
We are the second-largest LNG liquefaction technology provider globally. Our Optimized Cascade
®
liquefaction technology has been licensed for use in 27 LNG trains around the world, with feasibility studies
<