Asset Retirement Obligations

12 Months Ended

Dec. 31, 2018

Asset Retirement Obligations [Abstract]

Note I – Asset Retirement Obligations

The asset retirement obligations liabilities (ARO) recognized by the Company at December 31, 2018 and 2017 are related to the estimated costs to dismantle and abandon its producing oil and gas properties and related equipment.

A reconciliation of the beginning and ending aggregate carrying amount of the asset retirement obligation for 2018 and 2017 is shown in the following table.



(Thousands of dollars)	2018		2017
Balance at beginning of year	$	722,139	781,057
Accretion expense		44,559	42,590
Liabilities incurred		13,886	52,331
Liabilities assumed from PAI		359,643	–
Revisions of previous estimates		(24,959)	(47,612)
Liabilities settled		(23,398)	(29,111)
Liabilities assumed by purchaser of oil and gas assets		–	(87,456)
Changes due to translation of foreign currencies		(8,966)	10,340
Balance at end of year		1,082,904	722,139
Current portion of liability at end of year1		(55,481)	(12,840)
Noncurrent portion of liability at end of year	$	1,027,423	709,299

1Included in Other accrued liabilities on the Consolidated Balance Sheet.

The estimation of future ARO is based on a number of assumptions requiring professional judgment. The Company cannot predict the type of revisions to these assumptions that may be required in future periods due to the availability of additional information such as: prices for oil field services, technological changes, governmental requirements and other factors.

In 2017, revisions of previous estimates primarily reflected the impact of lower rig service rates in the U.S.

Liabilities assumed from PAI in 2018 primarily represent obligations assumed as part of the MP GOM acquisition

(see Note D).