Risk Management (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosures [Line Items]

Schedule of Notional Amounts of Outstanding Derivative Positions

As of September 30, 2020, we had the following outstanding commodity forward contracts to hedge our forecasted energy commodity purchases and sales:

	Net open position long/(short)
Derivatives designated as hedging contracts
Crude oil fixed price	(20.2)	MMBbl
Crude oil basis	(2.6)	MMBbl
Natural gas fixed price	(34.8)	Bcf
Natural gas basis	(34.8)	Bcf
NGL fixed price	(1.2)	MMBbl
Derivatives not designated as hedging contracts
Crude oil fixed price	(2.4)	MMBbl
Crude oil basis	(0.9)	MMBbl
Natural gas fixed price	(9.7)	Bcf
Natural gas basis	2.2	Bcf
NGL fixed price	(1.4)	MMBbl

Schedule of Interest Rate Derivatives

The following table summarizes our outstanding interest rate contracts as of September 30, 2020:

	Notional amount		Accounting treatment	Maximum term
	(In millions)
Derivatives designated as hedging instruments
Fixed-to-variable interest rate contracts(a)	$	7,625	Fair value hedge	March 2035
Variable-to-fixed interest rate contracts	250		Cash flow hedge	January 2023
Derivatives not designated as hedging instruments
Variable-to-fixed interest rate contracts	3,500		Mark-to-Market	December 2021

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(a)The principal amount of hedged senior notes consisted of $900 million included in “Current portion of debt” and $6,725 million included in “Long-term debt” on our accompanying consolidated balance sheet.

Schedule of Foreign Exchange Contracts, Statement of Financial Position

The following table summarizes our outstanding foreign currency contracts as of September 30, 2020:

	Notional amount		Accounting treatment	Maximum term
	(In millions)
Derivatives designated as hedging instruments
EUR-to-USD cross currency swap contracts(a)	$	1,358	Cash flow hedge	March 2027

_______

(a)These swaps eliminate the foreign currency risk associated with our Euro-denominated debt.

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table summarizes the fair values of our derivative contracts included in our accompanying consolidated balance sheets:

Fair Value of Derivative Contracts
		Derivatives Asset				Derivatives Liability
		September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
	Location	Fair value				Fair value
		(In millions)
Derivatives designated as hedging instruments
Energy commodity derivative contracts	Fair value of derivative contracts/(Other current liabilities)	$	103	$	31	$	(25)	$	(43)
	Deferred charges and other assets/(Other long-term liabilities and deferred credits)	59		17		(4)		(8)
Subtotal		162		48		(29)		(51)
Interest rate contracts	Fair value of derivative contracts/(Other current liabilities)	134		45		(3)		—
	Deferred charges and other assets/(Other long-term liabilities and deferred credits)	634		313		(8)		(1)
Subtotal		768		358		(11)		(1)
Foreign currency contracts	Fair value of derivative contracts/(Other current liabilities)	—		—		(14)		(6)
	Deferred charges and other assets/(Other long-term liabilities and deferred credits)	70		46		—		—
Subtotal		70		46		(14)		(6)
Total		1,000		452		(54)		(58)
Derivatives not designated as hedging instruments
Energy commodity derivative contracts	Fair value of derivative contracts/(Other current liabilities)	19		8		(10)		(7)
	Deferred charges and other assets/(Other long-term liabilities and deferred credits)	6		—		(1)		—
Subtotal		25		8		(11)		(7)
Interest rate contracts	Fair value of derivative contracts/(Other current liabilities)	—		—		(3)		—
Subtotal		—		—		(3)		—
Total		25		8		(14)		(7)
Total derivatives		$	1,025	$	460	$	(68)	$	(65)

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following two tables summarize the fair value measurements of our derivative contracts based on the three levels established by the ASC. The tables also identify the impact of derivative contracts which we have elected to present on our accompanying consolidated balance sheets on a gross basis that are eligible for netting under master netting agreements.

	Balance sheet asset fair value measurements by level
	Level 1		Level 2		Level 3		Gross amount		Contracts available for netting		Cash collateral held(b)		Net amount
	(In millions)
As of September 30, 2020
Energy commodity derivative contracts(a)	$	3	$	184	$	—	$	187	$	(28)	$	—	$	159
Interest rate contracts	—		768		—		768		(2)		—		766
Foreign currency contracts	—		70		—		70		(14)		—		56
As of December 31, 2019
Energy commodity derivative contracts(a)	$	19	$	37	$	—	$	56	$	(19)	$	(21)	$	16
Interest rate contracts	—		358		—		358		—		—		358
Foreign currency contracts	—		46		—		46		(6)		—		40

	Balance sheet liability fair value measurements by level
	Level 1		Level 2		Level 3		Gross amount		Contracts available for netting		Cash collateral posted(b)		Net amount
	(In millions)
As of September 30, 2020
Energy commodity derivative contracts(a)	$	(29)	$	(11)	$	—	$	(40)	$	28	$	8	$	(4)
Interest rate contracts	—		(14)		—		(14)		2		—		(12)
Foreign currency contracts	—		(14)		—		(14)		14		—		—
As of December 31, 2019
Energy commodity derivative contracts(a)	$	(3)	$	(55)	$	—	$	(58)	$	19	$	—	$	(39)
Interest rate contracts	—		(1)		—		(1)		—		—		(1)
Foreign currency contracts	—		(6)		—		(6)		6		—		—

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(a)Level 1 consists primarily of NYMEX natural gas futures. Level 2 consists primarily of OTC WTI swaps, NGL swaps and crude oil basis swaps.

(b)Any cash collateral paid or received is reflected in this table, but only to the extent that it represents variation margins. Any amount associated with derivative prepayments or initial margins that are not influenced by the derivative asset or liability amounts or those that are determined solely on their volumetric notional amounts are excluded from this table.

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following tables summarize the pre-tax impact of our derivative contracts in our accompanying consolidated statements of operations and comprehensive income (loss):

Derivatives in fair value hedging relationships	Location	Gain/(loss) recognized in income on derivative and related hedged item
		Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019
		(In millions)
Interest rate contracts	Interest, net	$	(50)	$	117	$	409	$	453
Hedged fixed rate debt(a)	Interest, net	$	50	$	(119)	$	(418)	$	(468)

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(a)As of September 30, 2020, the cumulative amount of fair value hedging adjustments to our hedged fixed rate debt was an increase of $777 million included in “Debt fair value adjustments” on our accompanying consolidated balance sheet.

Derivatives in cash flow hedging relationships	Gain/(loss) recognized in OCI on derivative(a)				Location	Gain/(loss) reclassified from Accumulated OCI into income(b)
	Three Months Ended September 30,					Three Months Ended September 30,
	2020		2019			2020		2019
	(In millions)					(In millions)
Energy commodity derivative contracts	$	(143)	$	96	Revenues—Commodity sales	$	(47)	$	9
					Costs of sales	(7)		(3)
Interest rate contracts	—		(1)		Earnings from equity investments(c)	(1)		—
Foreign currency contracts	70		(69)		Other, net	61		(59)
Total	$	(73)	$	26	Total	$	6	$	(53)

Derivatives in cash flow hedging relationships	Gain/(loss) recognized in OCI on derivative(a)				Location	Gain/(loss) reclassified from Accumulated OCI into income(b)
	Nine Months Ended September 30,					Nine Months Ended September 30,
	2020		2019			2020		2019
	(In millions)					(In millions)
Energy commodity derivative contracts	$	(29)	$	(74)	Revenues—Commodity sales	$	(145)	$	15
					Costs of sales	(12)		8
Interest rate contracts	(9)		(2)		Earnings from equity investments(c)	(1)		2
Foreign currency contracts	17		(95)		Other, net	64		(71)
Total	$	(21)	$	(171)	Total	$	(94)	$	(46)

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(a)We expect to reclassify an approximate $68 million gain associated with cash flow hedge price risk management activities included in our accumulated other comprehensive loss balance as of September 30, 2020 into earnings during the next twelve months (when the associated forecasted transactions are also expected to impact earnings); however, actual amounts reclassified into earnings could vary materially as a result of changes in market prices. 

(b)During the nine months ended September 30, 2019, we recognized a $12 million gain associated with a write-down of hedged inventory. All other amounts reclassified were the result of the hedged forecasted transactions actually affecting earnings (i.e., when the forecasted sales and purchases actually occurred).

(c)Amounts represent our share of an equity investee’s accumulated other comprehensive income (loss).

Derivatives in net investment hedging relationships	Gain/(loss) recognized in OCI on derivative
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(In millions)
Foreign currency contracts	$	—	$	—	$	—	$	(8)
Total	$	—	$	—	$	—	$	(8)

Derivatives not designated as hedging instruments	Location	Gain/(loss) recognized in income on derivatives
		Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019
		(In millions)
Energy commodity derivative contracts	Revenues—Commodity sales	$	87	$	12	$	353	$	36
	Costs of sales	12		—		18		(3)
	Earnings from equity investments(b)	—		—		—		2
Total(a)		$	99	$	12	$	371	$	35

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(a)The three and nine months ended September 30, 2020 include approximate gains of $96 million and $349 million, respectively, and the three and nine months ended September 30, 2019 include an approximate loss of $4 million and $2 million, respectively. These gains and losses were associated with natural gas, crude and NGL derivative contract settlements.

(b)Amounts represent our share of an equity investee’s income (loss).