We determine if an arrangement is a lease at inception by evaluating whether the contract conveys the right to control an identified asset during the period of use. ROU assets represent our right to use an identified asset for the lease term and lease obligations represent our obligation to make payments as set forth in the lease arrangement. ROU assets and lease liabilities are recognized in the Consolidated Balance Sheet as operating leases or finance leases at the commencement date based on the present value of the minimum lease payments over the lease term. Where the implicit discount rate in a lease is not readily determinable, we use our incremental borrowing rate based on information available at the commencement date for determining the present value of the minimum lease payments. The lease term used in measurement of our lease obligations includes options to extend or terminate the lease when, in our judgment, it is reasonably certain that we will exercise that option. Variable lease payments that depend on an index or a rate are included in the measurement of lease obligations using the index or rate at the commencement date. Variable lease payments that vary because of changes in facts or circumstances after the commencement date of the lease are not included in the minimum lease payments used to measure lease obligations. We have agreements that include financial obligations for lease and nonlease components. For purposes of measuring lease obligations, we have elected not to separate nonlease components from lease components for the following classes of assets: drilling rigs, office space, offshore vessels, and aircraft. We apply a portfolio approach to account for operating lease ROU assets and liabilities for certain vehicles, railcars, field equipment and office equipment leases.

Finance lease cost is recognized as amortization of the ROU asset and interest expense on the lease liability. Operating lease cost is generally recognized on a straight-line basis. Operating lease costs for drilling rigs used to drill development wells and successful exploration wells are capitalized. Operating lease cost for other ROU assets used in oil and gas producing activities are either capitalized or expensed on a straight-line basis based on the nature of operation for which the ROU asset is utilized.

Leases with an initial term of 12 months or less are not recorded on the balance sheet as permitted under ASC 842. We recognize lease cost for short-term leases on a straight-line basis over the term of the lease. Some of our leases include one or more options to renew. The renewal option is at our sole discretion and is not included in the lease term for measurement of the lease obligation unless we are reasonably certain, at the commencement date of the lease, to renew the lease.

Operating and finance leases presented on the Consolidated Balance Sheet at December 31, 2019 were as follows:

	Operating Leases		Finance Leases
	(In millions)
Right-of-use assets — net (a)	$	447	$	299
Lease obligations:
Current	$	182	$	17
Long-term		353		238
Total lease obligations	$	535	$	255

Lease obligations represent 100% of the present value of future minimum lease payments in the lease arrangement. Where we have contracted directly with a lessor in our role as operator of an unincorporated oil and gas venture, we bill our partners their proportionate share for reimbursements as payments under lease agreements become due pursuant to the terms of our joint operating and other agreements.

Operating leases: In the normal course of business, we primarily lease drilling rigs, equipment, logistical assets (offshore vessels, aircraft, and shorebases), and office space.

Finance leases: In 2018, as detailed in Note 8, Debt, we entered into a sale and lease-back arrangement for a floating storage and offloading vessel (FSO) to handle produced condensate at North Malay Basin, offshore Peninsular Malaysia (Hess operated – 50%). The remaining lease term utilized in the lease obligation is 13.8 years.

	Operating Leases			Finance Leases
	(In millions)
2020	$	200		$	36
2021		72			36
2022		65			36
2023		64			36
2024		65			36
Remaining years		133			212
Total lease payments		599			392
Less: Imputed interest		(64	)		(137	)
Total lease obligations	$	535		$	255

The following information relates to the Operating and Finance leases recorded at December 31, 2019:

	Operating Leases	Finance Leases
Weighted average remaining lease term	5.4 years	13.8 years
Range of remaining lease terms	0.1 - 16.1 years	13.8 years
Weighted average discount rate	4.3%	7.9%

The components of lease costs for the year ended December 31, 2019 were as follows (in millions):

Operating lease cost	$	414
Finance lease cost:
Amortization of leased assets		43
Interest on lease obligations		21
Short-term lease cost (a)		164
Variable lease cost (b)		89
Sublease income (c)		(12	)
Total lease cost (d)	$	719

The above lease costs represent 100% of the lease payments due for the period, including where we as operator have contracted directly with suppliers. As the payments under lease agreements where we are operator become due, we bill our partners their proportionate share for reimbursement pursuant to the terms of our joint operating agreements. Reimbursements are not reflected in the table above. Certain lease costs above associated with exploration and development activities are included in capital expenditures.

Supplemental cash flow information related to leases for the year ended December 31, 2019 was as follows:

	Operating Leases		Finance Leases
	(In millions)
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows (a)	$	419	$	21
Financing cash flows (a)		—		55
Noncash transactions:
Leased assets recognized for new lease obligations incurred	14			—