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PROVISIONS (Tables)
 12 Months Ended
Dec. 31, 2020
PROVISIONS  
Schedule of provisions

 

                                                                                                                                                                                    

($ millions)

 

Decommissioning
and Restoration(1)

 

Royalties

 

Other(2)

 

Total

 

 

At December 31, 2018

 

7 239

 
98

 
314

 

7 651

 

 

Adoption of IFRS 16 impact

 

—

 

—

 
(21

)
(21

)

 

At January 1, 2019, adjusted

 

7 239

 
98

 
293

 

7 630

 

 

Liabilities incurred

 
346

 
60

 
(4

)
402

 

 

Change in discount rate

 

1 344

 

—

 

—

 

1 344

 

 

Changes in estimates

 
193

 
(25

)
1

 
169

 

 

Liabilities settled

 
(464

)

—

 
(14

)
(478

)

 

Accretion

 
270

 

—

 

—

 
270

 

 

Asset disposals

 
(1

)

—

 

—

 
(1

)

 

Foreign exchange

 
(29

)

—

 

—

 
(29

)

 

At December 31, 2019

 

8 898

 
133

 
276

 

9 307

 

 

Less: current portion

 
(475

)
(133

)
(23

)
(631

)

 

 

 

8 423

 

—

 
253

 

8 676

 

 

At December 31, 2019

 

8 898

 
133

 
276

 

9 307

 

 

Liabilities incurred

 
967

 
16

 
190

 

1 173

 

 

Change in discount rate

 
402

 

—

 

—

 
402

 

 

Changes in estimates

 
(268

)
(71

)
5

 
(334

)

 

Liabilities settled

 
(231

)
(7

)
(4

)
(242

)

 

Accretion

 
278

 

—

 

—

 
278

 

 

Foreign exchange

 
(2

)

—

 

—

 
(2

)

 

At December 31, 2020

 

10 044

 
71

 
467

 

10 582

 

 

Less: current portion

 
(250

)
(71

)
(206

)
(527

)

 

 

 

9 794

 

—

 
261

 

10 055

 

 

 

 

 

(1)          

Represents decommissioning and restoration provisions associated with the retirement of Property, Plant and Equipment and Exploration and Evaluation assets. The total undiscounted amount of estimated future cash flows required to settle the obligations at December 31, 2020 was approximately $14.1 billion (December 31, 2019 – $12.9 billion). A weighted average credit-adjusted risk-free interest rate of 3.10% was used to discount the provision recognized at December 31, 2020 (December 31, 2019 – 3.30%). The credit-adjusted risk-free interest rate used reflects the expected time frame of the provisions. Payments to settle the decommissioning and restoration provisions occur on an ongoing basis and will continue over the lives of the operating assets, which can exceed 50 years.

(2)          

Includes legal and environmental provisions. It also includes a provision, with the offset being recorded to transportation expense, for $186 million (after-tax $142 million) related to the Keystone XL pipeline project.

 

 

Schedule of impact of changes in discount rate on decommissioning and restoration liabilities.

 

                                                                                                                                                                                    

As at December 31

 
2020

 
2019

 

 

1% Increase

 

(1 919

)

(1 629

)

 

1% Decrease

 

2 806

 

2 365