Item 3. LEGAL PROCEEDINGS

LEGAL PROCEEDINGS

The following is a description of reportable legal

proceedings, including those involving governmental

authorities under federal, state and local laws regulating

the discharge of materials into the environment.

While it is not possible to accurately predict

the final outcome of these pending proceedings,

if any one or

more of such proceedings were to be decided adversely

to ConocoPhillips, we expect there would be

no

material effect on our consolidated financial position.

Nevertheless, such proceedings are reported pursuant

to

SEC regulations.

On April 30, 2012, the separation of our downstream

business was completed, creating two independent

energy companies: ConocoPhillips and Phillips

In connection with the separation, we entered

into an

Indemnification and Release Agreement, which

provides for cross-indemnities between Phillips

66 and us and

established procedures for handling claims subject

to indemnification and related matters, such

as legal

proceedings.

We have included matters where we remain or have subsequently become

a party to a

proceeding relating to Phillips 66, in accordance

with SEC regulations.

We do not expect any of those matters

to result in a net claim against us.

Matters Previously Reported—Phillips 66

In May 2012, the Illinois Attorney General's

office filed and notified ConocoPhillips of a complaint with

respect to operations at the Phillips 66 WRB

Wood River Refinery alleging violations of the Illinois

groundwater standards and a third-party's

hazardous waste permit.

The complaint seeks remediation of area

groundwater; compliance with the hazardous waste

permit; enhanced pipeline and tank integrity measures;

additional spill reporting; and yet-to-be specified

amounts for fines and penalties.