Capitalized Exploratory Well Costs

6 Months Ended

Jun. 30, 2011

Capitalized Exploratory Well Costs [Abstract]

6. Capitalized Exploratory Well Costs

The following table discloses the net changes in capitalized exploratory well costs pending determination of proved reserves for the six months ended June 30, 2011 (in millions):


Balance at January 1	$	1,783
Additions to capitalized exploratory well costs pending the determination of proved reserves		428
Reclassification to wells, facilities, and equipment based on the determination of proved reserves		(68	)
Capitalized exploratory well costs charged to expense		(70	)
Dispositions		(11	)

Balance at end of period	$	2,062

Capitalized exploratory well costs charged to expense in the preceding table excludes $134 million of exploratory well costs which were incurred and subsequently expensed in 2011. Capitalized exploratory well costs greater than one year old after completion of drilling were $1,341 million at June 30, 2011. Approximately 45% of the capitalized well costs in excess of one year relates to two separate projects in the deepwater Gulf of Mexico, Tubular Bells and Pony, where development planning is progressing, with sanction anticipated later in 2011 for Tubular Bells and 2012 for Pony. Approximately 22% relates to Block WA-390-P, offshore Western Australia, where further drilling, other appraisal activities and commercial analysis are ongoing. Approximately 20% relates to Area 54, offshore Libya, where force majeure has been declared following the imposition of sanctions against Libya. The remainder of the capitalized well costs in excess of one year relates to projects where further drilling is planned or development planning and other assessment activities are ongoing to determine the economic and operating viability of the projects.