Leases

12 Months Ended

Dec. 31, 2024

Leases [Abstract]

Leases

6.  Leases

Operating and finance lease obligations at December 31 included in the Consolidated Balance Sheet were as follows:

	Operating Leases				Finance Leases
	2024		2023		2024		2023
	(In millions)
Right-of-use assets — net (a)	$	652	$	720	$	90	$	108
Lease obligations:
Current	$	321	$	347	$	25	$	23
Long-term	404		459		132		156
Total lease obligations	$	725	$	806	$	157	$	179

(a)At December 31, 2024, finance lease ROU assets had a cost of $212 million (2023: $212 million) and accumulated amortization of $122 million (2023: $104 million).

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.

The nature of our leasing arrangements at December 31, 2024 was as follows:

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, 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.  At December 31, 2024, the remaining lease term for the FSO was 8.8 years.

Maturities of lease obligations at December 31, 2024 were as follows:

	Operating Leases		Finance Leases
	(In millions)
2025	$	349	$	36
2026	200		31
2027	53		22
2028	26		23
2029	24		22
Remaining years	153		77
Total lease payments	805		211
Less: Imputed interest	(80)		(54)
Total lease obligations	$	725	$	157

The following information relates to the operating and finance leases at December 31:

	Operating Leases		Finance Leases
	2024	2023	2024	2023
Weighted average remaining lease term	4.7 years	5.0 years	8.8 years	9.8 years
Range of remaining lease terms	0.1 - 11.5 years	0.1 - 12.5 years	8.8 years	9.8 years
Weighted average discount rate	5.1%	5.1%	7.9%	7.9%

The components of lease costs were as follows:

	2024		2023		2022
	(In millions)
Operating lease cost (a)	$	385	$	241	$	114
Finance lease cost:
Amortization of leased assets	18		18		18
Interest on lease obligations	13		15		18
Short-term lease cost (b)	267		294		311
Variable lease cost (c)	60		67		33
Sublease income (d)	(20)		(19)		(18)
Total lease cost	$	723	$	616	$	476

(a)Operating lease cost in 2024 included a drilling rig and offshore support vessels in the Gulf of America. Operating lease cost in 2023 included a drilling rig at North Malay Basin used for a 15 well development drilling program spanning 2023 and 2024, and offshore support vessels in the Gulf of America.

(b)Short-term lease cost is primarily attributable to equipment used in global exploration, development, production, and crude oil marketing activities.  Future short-term lease costs will vary based on activity levels of our operated assets. In 2024, 2023 and 2022, short-term lease cost included drilling rigs and offshore support vessels used primarily for exploration and abandonment activities in the Gulf of America and workover rigs for maintenance activities in the Bakken.

(c)Variable lease costs for drilling rigs result from differences in the minimum rate and the actual usage of the ROU asset during the lease period.  Variable lease costs for logistical assets result from differences in stated monthly rates and total charges reflecting the actual usage of the ROU asset during the lease period.  Variable lease costs for our office leases represent common area maintenance charges which have not been separated from lease components.

(d)We sublease certain of our office space to third parties under our head lease.

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 were as follows:

	Operating Leases						Finance Leases
	2024		2023		2022		2024		2023		2022
	(In millions)
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows (a)	$	401	$	254	$	126	$	13	$	15	$	18
Financing cash flows (a)	—		—		—		22		21		19
Noncash transactions:
Leased assets recognized for new lease obligations incurred (b)	40		267		294		—		—		—
Changes in leased assets and lease obligations due to lease modifications and remeasurements of lease payments (c)	239		97		16		—		—		—

(a)Amounts represent gross lease payments before any recovery from partners.

(b)In 2023, primarily related to leases for a drilling rig and offshore support vessels in the Gulf of America. In 2022, primarily related to leases for drilling rigs in the Bakken and at North Malay Basin.

(c)In 2024, primarily related to reassessments of the lease terms for a drilling rig and a offshore support vessel in the Gulf of America upon exercise of renewal options. In 2023, primarily related to reassessments of the lease terms for a drilling rig at North Malay Basin, and offshore support vessels and aircraft in the Gulf of America.

Leases

6.  Leases

Operating and finance lease obligations at December 31 included in the Consolidated Balance Sheet were as follows:

	Operating Leases				Finance Leases
	2024		2023		2024		2023
	(In millions)
Right-of-use assets — net (a)	$	652	$	720	$	90	$	108
Lease obligations:
Current	$	321	$	347	$	25	$	23
Long-term	404		459		132		156
Total lease obligations	$	725	$	806	$	157	$	179

(a)At December 31, 2024, finance lease ROU assets had a cost of $212 million (2023: $212 million) and accumulated amortization of $122 million (2023: $104 million).

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.

The nature of our leasing arrangements at December 31, 2024 was as follows:

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, 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.  At December 31, 2024, the remaining lease term for the FSO was 8.8 years.

Maturities of lease obligations at December 31, 2024 were as follows:

	Operating Leases		Finance Leases
	(In millions)
2025	$	349	$	36
2026	200		31
2027	53		22
2028	26		23
2029	24		22
Remaining years	153		77
Total lease payments	805		211
Less: Imputed interest	(80)		(54)
Total lease obligations	$	725	$	157

The following information relates to the operating and finance leases at December 31:

	Operating Leases		Finance Leases
	2024	2023	2024	2023
Weighted average remaining lease term	4.7 years	5.0 years	8.8 years	9.8 years
Range of remaining lease terms	0.1 - 11.5 years	0.1 - 12.5 years	8.8 years	9.8 years
Weighted average discount rate	5.1%	5.1%	7.9%	7.9%

The components of lease costs were as follows:

	2024		2023		2022
	(In millions)
Operating lease cost (a)	$	385	$	241	$	114
Finance lease cost:
Amortization of leased assets	18		18		18
Interest on lease obligations	13		15		18
Short-term lease cost (b)	267		294		311
Variable lease cost (c)	60		67		33
Sublease income (d)	(20)		(19)		(18)
Total lease cost	$	723	$	616	$	476

(a)Operating lease cost in 2024 included a drilling rig and offshore support vessels in the Gulf of America. Operating lease cost in 2023 included a drilling rig at North Malay Basin used for a 15 well development drilling program spanning 2023 and 2024, and offshore support vessels in the Gulf of America.

(b)Short-term lease cost is primarily attributable to equipment used in global exploration, development, production, and crude oil marketing activities.  Future short-term lease costs will vary based on activity levels of our operated assets. In 2024, 2023 and 2022, short-term lease cost included drilling rigs and offshore support vessels used primarily for exploration and abandonment activities in the Gulf of America and workover rigs for maintenance activities in the Bakken.

(c)Variable lease costs for drilling rigs result from differences in the minimum rate and the actual usage of the ROU asset during the lease period.  Variable lease costs for logistical assets result from differences in stated monthly rates and total charges reflecting the actual usage of the ROU asset during the lease period.  Variable lease costs for our office leases represent common area maintenance charges which have not been separated from lease components.

(d)We sublease certain of our office space to third parties under our head lease.

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 were as follows:

	Operating Leases						Finance Leases
	2024		2023		2022		2024		2023		2022
	(In millions)
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows (a)	$	401	$	254	$	126	$	13	$	15	$	18
Financing cash flows (a)	—		—		—		22		21		19
Noncash transactions:
Leased assets recognized for new lease obligations incurred (b)	40		267		294		—		—		—
Changes in leased assets and lease obligations due to lease modifications and remeasurements of lease payments (c)	239		97		16		—		—		—

(a)Amounts represent gross lease payments before any recovery from partners.

(b)In 2023, primarily related to leases for a drilling rig and offshore support vessels in the Gulf of America. In 2022, primarily related to leases for drilling rigs in the Bakken and at North Malay Basin.

(c)In 2024, primarily related to reassessments of the lease terms for a drilling rig and a offshore support vessel in the Gulf of America upon exercise of renewal options. In 2023, primarily related to reassessments of the lease terms for a drilling rig at North Malay Basin, and offshore support vessels and aircraft in the Gulf of America.