Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

The company’s derivative instruments principally include crude oil, natural gas and refined product futures, swaps, options, and forward contracts. None of the company’s derivative instruments is designated as a hedging instrument, although certain of the company’s affiliates make such a designation. The company’s derivatives are not material to the company’s financial position, results of operations or liquidity. The company believes it has no material market or credit risks to its operations, financial position or liquidity as a result of its commodities and other derivatives activities.

Derivative instruments measured at fair value at September 30, 2012, and December 31, 2011, and their classification on the Consolidated Balance Sheet and Consolidated Statement of Income are as follows:

Consolidated Balance Sheet: Fair Value of Derivatives Not Designated as Hedging Instruments

(Millions of Dollars)

Type of Contract	Balance Sheet Classification	At September 30 2012		At December 31 2011
Commodity	Accounts and notes receivable, net	$	44	$	133
Commodity	Long-term receivables, net	42		75
Total Assets at Fair Value		$	86	$	208
Commodity	Accounts payable	$	130	$	36
Commodity	Deferred credits and other noncurrent obligations	42		66
Total Liabilities at Fair Value		$	172	$	102

Consolidated Statement of Income: The Effect of Derivatives Not Designated as Hedging Instruments

(Millions of dollars)

		Gain / (Loss) Three Months Ended September 30						Gain / (Loss) Nine Months Ended September 30
Type of Contract	Statement of Income Classification	2012			2011			2012			2011
Commodity	Sales and other operating revenues	$	(207	)	$	130		$	(92	)	$	(194	)
Commodity	Purchased crude oil and products	1			(11		)	(10		)	20
Commodity	Other income	3			3			7			1
		$	(203	)	$	122		$	(95	)	$	(173	)