Asset Retirement Obligations

12 Months Ended

Dec. 31, 2020

Asset Retirement Obligation Disclosure [Abstract]

Note I – Asset Retirement Obligations

The asset retirement obligations liabilities (ARO) recognized by the Company at December 31, 2020 and 2019 are related to the estimated costs to dismantle and abandon its producing oil and natural gas properties and related equipment.

A reconciliation of the beginning and ending aggregate carrying amount of the asset retirement obligation for 2020 and 2019 is shown in the following table.


(Thousands of dollars)	2020		2019
Balance at beginning of year	$	865,109	800,117
Accretion expense	42,136		40,506
Liabilities incurred	14,736		14,759
Liabilities assumed from acquisitions	—		64,810
Revisions of previous estimates	(70,098)		(34,371)
Liabilities settled	(4,816)		(25,544)

Liabilities associated with assets held for sale	(21)		(240)
Changes due to translation of foreign currencies	2,910		5,072
Balance at end of year	849,956		865,109
Current portion of liability at end of year ¹	(33,648)		(39,315)
Noncurrent portion of liability at end of year	$	816,308	825,794

1 Included 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.

Liabilities assumed in 2019, primarily represent obligations assumed as part of the LLOG acquisition (see Note D).