Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2011

Derivative Instruments and Hedging Activities [Abstract]

Derivative Instruments and Hedging Activities

Note 12.  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 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 June 30, 2011 and December 31, 2010, 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		At June 30		At December 31
Contract	Balance Sheet Classification	2011		2010
Commodity	Accounts and notes receivable, net		$   68		$   58
Commodity	Long-term receivables, net		57		64
Total Assets at Fair Value			$ 125		$ 122
Commodity	Accounts payable		$   70		$ 131
Commodity	Deferred credits and other noncurrent obligations		32		40
Total Liabilities at Fair Value			$ 102		$ 171

Consolidated Statement of Income: The Effect of Derivatives Not Designated as Hedging Instruments
(Millions of dollars)

		Gain/(Loss)					Gain/(Loss)
		Three Months Ended					Six Months Ended
Type of		June 30					June 30
Contract	Statement of Income Classification	2011		2010			2011			2010
Commodity	Sales and other operating revenues	$	75	$	146		$	(324	)	$	152
Commodity	Purchased crude oil and products		27		5			31			(26	)
Commodity	Other income		—		(9	)		(2	)		(9	)
		$	102	$	142		$	(295	)	$	117