filings.toolsCover and table of contents
68K characters. Original on sec.gov · Markdown
Cover and table of contents
2021
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
Form
10-K
(Mark One)
[X]
ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31, 2021
OR
[ ]
TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission file number:
001-32395
ConocoPhillips
(Exact name of registrant as specified in its
charter)
Delaware
01-0562944
(State or other jurisdiction of incorporation
or organization)
(I.R.S. Employer identification No.)
925 N. Eldridge Parkway
,
Houston
,
TX
77079
(Address of principal executive offices) (Zip
Code)
Registrant's telephone number, including area code:
-
293-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbols
Name of each exchange on which registered
Common Stock, $.01 Par Value
COP
New York Stock Exchange
7% Debentures due 2029
CUSIP—718507BK1
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.
[x]
Yes
[ ] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
[ ] Yes
[x]
No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
[x]
Yes
[ ] No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data
File required to be submitted pursuant
to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
[x]
Yes
[ ] No
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated
filer, a smaller reporting
company, or an emerging growth company.
See the definitions of “large accelerated filer,”
“accelerated filer,”
“smaller reporting
company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
[x]
Accelerated filer [
]
Non-accelerated filer [
]
Smaller reporting company
[ ]
Emerging growth
company
[ ]
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [
]
Indicate by check mark whether the registrant has filed a report on and attestation to
its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit report.
[ x ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). [
] Yes
[x]
No
The aggregate market value of common stock held by non-affiliates of the registrant
on June 30, 2021, the last business day of the
registrant’s most recently completed second fiscal quarter,
based on the closing price on that date of $60.90, was $
81.5
billion.
The registrant had
1,299,526,916
shares of common stock outstanding at January 31, 2022.
Documents incorporated by reference:
Portions of the Proxy Statement for
the Annual Meeting of Stockholders to be held on May 10, 2022 (Part III)
Table of Contents
Page
Commonly Used Abbreviations
Item
Part I
1 and 2.
Segment and Geographic Information
Europe, Middle East and North Africa
1A.
1B.
Information About our Executive Officers
Part II
Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
[Reserved]
Management’s Discussion and Analysis of Financial Condition and
7A.
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and
9A.
9B.
9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Part III
Directors, Executive Officers and Corporate Governance
Security Ownership of Certain Beneficial Owners and Management and
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services
Part IV
Exhibits, Financial Statement Schedules
Commonly Used Abbreviations
ConocoPhillips
2021 10-K
Commonly Used Abbreviations
The following industry-specific, accounting
and other terms, and abbreviations may
be commonly used in this
report.
Currencies
Accounting
$ or USD
U.S. dollar
ARO
asset retirement obligation
CAD
Canadian dollar
ASC
accounting standards codification
EUR
Euro
ASU
accounting standards update
GBP
British pound
DD&A
depreciation, depletion and
amortization
Units of Measurement
FASB
Financial Accounting Standards
BBL
barrel
Board
BCF
billion cubic feet
FIFO
first-in, first-out
BOE
barrels of oil equivalent
G&A
general and administrative
MBD
thousands of barrels per day
GAAP
generally accepted accounting
MCF
thousand cubic feet
principles
MBOD
thousand barrels of oil per day
LIFO
last-in, first-out
MM
million
NPNS
normal purchase normal sale
MMBOE
million barrels of oil equivalent
PP&E
properties, plants and equipment
MMBOD
million barrels of oil per day
VIE
variable interest entity
MBOED
thousands of barrels of oil
equivalent per day
MMBOED
millions of barrels of oil
Miscellaneous
equivalent per day
DE&I
diversity,
equity and inclusion
MMBTU
million British thermal units
EPA
Environmental Protection
Agency
MMCFD
million cubic feet per day
ESG
Environmental, Social and
Governance
EU
European Union
Industry
FERC
Federal Energy Regulatory
BLM
Bureau of Land Management
Commission
CBM
coalbed methane
GHG
greenhouse gas
E&P
exploration and production
HSE
health, safety and environment
CCUS
carbon capture utilization
and
storage
ICC
International Chamber of
Commerce
FEED
front-end engineering and design
ICSID
World Bank’s
International
FPS
floating production system
Centre for Settlement of
FPSO
floating production, storage
and
Investment Disputes
offloading
IRS
Internal Revenue Service
G&G
geological and geophysical
OTC
over-the-counter
JOA
joint operating agreement
NYSE
New York Stock Exchange
LNG
liquefied natural gas
SEC
U.S. Securities and Exchange
NGLs
natural gas liquids
Commission
OPEC
Organization of Petroleum
TSR
total shareholder return
Exporting Countries
U.K.
United Kingdom
PSC
production sharing contract
U.S.
United States of America
PUDs
proved undeveloped reserves
VROC
variable return of cash
SAGD
steam-assisted gravity
drainage
WCS
Western Canada Select
WTI
West Texas
Intermediate
Business and Properties
ConocoPhillips
2021 10-K
Part I
Unless otherwise indicated, “the company,”
“we,” “our,”
“us” and “ConocoPhillips” are used in this report
to refer
to the businesses of ConocoPhillips and its consolidated
subsidiaries.
Items 1 and 2—Business and Properties,
contain forward-looking statements
including, without limitation, statements
relating to our plans, strategies,
objectives, expectations and intentions
that are made pursuant to the
“safe harbor” provisions of the Private
Securities Litigation Reform
Act of 1995.
The words
“anticipate,”
“believe,” “budget,”
“continue,”
“could,”
“effort,”
“estimate,”
“expect,”
“forecast,”
“goal,”
“guidance,”
“intend,” “may,”
“objective,”
“outlook,”
“plan,” “potential,”
“predict,” “projection,”
“seek,” “should,”
“target,” “will,”
“would,”
and similar expressions identify forward
-looking
statements.
The company does not undertake
to update, revise or correct any
forward-looking information
unless
required to do so under the federal
securities laws.
Readers are cautioned that
such forward-looking statements
should be read in conjunction with the company’s
disclosures under the headings “Risk Factors”
beginning on page
20 and “CAUTIONARY STATEMENT
FOR THE PURPOSES OF THE ‘SAFE HARBOR’ PROVISIONS
OF THE PRIVATE
SECURITIES LITIGATION
REFORM ACT OF 1995,”
beginning on pa
ge
Items 1 and 2.
Business and Properties
Corporate Structure
ConocoPhillips is an independent E&P company
headquartered in Houston, Texas
with operations and activities in
14 countries.
Our diverse, low cost of supply
portfolio includes resource-rich unconventional
plays in North
America; conventional assets in
North America, Europe, and Asia; LNG developments;
oil sands assets in Canada;
and an inventory of global conventional
and unconventional exploration
prospects.
On December 31, 2021, we
employed approximately 9,900
people worldwide and had total assets of
about $91 billion.
Total
company
production for the year was 1,567 MBOED.
ConocoPhillips was incorporated
in the state of Delaware on
November 16, 2001, in connection with, and in
anticipation of,
the merger between Conoco Inc. and Phillips
Petroleum Company.
The merger between Conoco
and Phillips was consummated on
August 30, 2002.
In April 2012, ConocoPhillips completed the separation
of the
downstream business into an independent,
publicly traded energy company,
Phillips 66.
On January 15, 2021, we completed the acquisition
of Concho Resources Inc. (Concho), an independent
oil and gas
exploration and production
company with operations in New Mexico
and West Texas
focused on the Permian
Basin.
For additional information related
to this transaction,
see
On December 1, 2021, we completed our acquisition
of Shell Enterprises LLC’s (Shell) assets
in the Delaware Basin.
Assets acquired include approximately
225,000 net acres of producing properties
located entirely in Texas.
For
additional information related to
this transaction,
see
Segment and Geographic Information
We manage our operations
through six operating segments,
defined by geographic region: Alaska;
Lower 48;
Canada; Europe, Middle East and
North Africa; Asia Pacific; and Other International.
For operating segment and
geographic information,
We explore for,
produce, transport and market
crude oil, bitumen, natural gas,
LNG and NGLs on a worldwide
basis.
At December 31, 2021, our operations
were producing in the U.S., Norway,
Canada, Australia, Indonesia,
Malaysia, Libya, China and Qatar.
Business and Properties
ConocoPhillips
2021 10-K
The information listed below
appears in the “Supplementary Data
- Oil and Gas Operations” disclosures following
the Notes to Consolidated Financial Statements
and is incorporated herein by
reference:
●
Proved worldwide crude oil, NGLs, natural
gas and bitumen reserves.
●
Net production of crude oil, NGLs, natural
gas and bitumen.
●
Average sales prices of crude oil,
NGLs, natural gas and bitumen.
●
Average production
costs per BOE.
●
Net wells completed, wells in progress
and productive wells.
●
Developed and undeveloped
acreage.
The following table is a summary of the proved
reserves information included in the “Supplementary
Data - Oil and
Gas Operations” disclosures following
the Notes to Consolidated Financial Statements.
Approximately 86 percent
of our proved reserves are in countries
that belong to the Organization
for Economic Cooperation
and
Development.
Natural gas reserves are converted
to BOE based on a 6:1 ratio: six MCF of natural
gas converts to
one BOE.
See Management’s Discussion
and Analysis of Financial Condition and Results of Operations
for a
discussion of factors that will enhance
the understanding of the following
summary reserves table.
Millions of Barrels of Oil Equivalent
Net Proved Reserves at December
2021
2020
2019
Crude oil
Consolidated operations
2,964
2,051
2,562
Equity affiliates
Total
Crude Oil
3,027
2,119
2,635
Natural gas liquids
Consolidated operations
Equity affiliates
Total
Natural Gas Liquids
Natural gas
Consolidated operations
1,523
1,011
1,209
Equity affiliates
Total
Natural Gas
2,140
1,632
1,945
Bitumen
Consolidated operations
Total
Bitumen
Total
consolidated operations
5,388
3,734
4,414
Total
equity affiliates
Total
company
6,101
4,459
5,262
Business and Properties
ConocoPhillips
2021 10-K
Alaska
The Alaska segment primarily explores for,
produces, transports and markets
crude oil, natural gas and NGLs.
We
are the largest crude oil producer in Alaska
and have major ownership interests
in two of North America’s
largest
oil fields located on Alaska’s
North Slope: Prudhoe Bay and Kuparuk.
We also have a 100 percent
interest in the
Alpine Field, located on the Western
North Slope.
Additionally, we
are one of Alaska’s
largest owners of state,
federal and fee exploration
leases, with approximately
1.3 million net undeveloped acres at year
-end 2021.
Alaska
operations contributed
19 percent of our consolidated liquids
production and 1 percent of our consolidated
natural gas production.
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Greater Prudhoe Area
36.1
%
Hilcorp
Greater Kuparuk Area
89.2-94.7
ConocoPhillips
-
Western North Slope
100.0
ConocoPhillips
-
Total
Alaska
Greater Prudhoe Area
The Greater Prudhoe Area includes the Prudhoe
Bay Field and five satellite fields, as
well as the Greater Point
McIntyre Area fields.
Prudhoe Bay,
the largest conventional
oil field in North America, is the site of a large
waterflood and enhanced oil recovery
operation, supported by a large
gas and water processing operation.
Prudhoe Bay’s western
satellite fields are Aurora,
Borealis, Polaris, Midnight Sun
and Orion, while the Point
McIntyre, Niakuk, Raven,
Lisburne and North Prudhoe Bay State fields are
part of the Greater Point McIntyre
Area.
Field installations include seven production
facilities, two gas plants, two
seawater plants and a central
power
station.
In September 2021, rotary drilling commenced after
18 months
of no drilling, resulting in four wells drilled and
brought online.
To help offset
decline, efforts were focused
on increasing rate through
well work, capacity
enhancements,
less downtime,
and NGL production.
Greater Kuparuk Area
We operate the Greater
Kuparuk Area, which consists
of the Kuparuk Field and four satellite fields:
Tarn, Tabasco,
Meltwater and West
Sak.
Kuparuk is located 40 miles west
of the Prudhoe Bay Field.
Field installations include
three central production facilities
which separate oil, natural
gas and water,
as well as a seawater treatment
plant.
Development drilling at Kuparuk consists
of rotary-drilled wells and horizontal
multi-laterals from existing well
bores utilizing coiled-tubing drilling.
We operated a coiled-tubi
ng drilling rig in the fourth quarter of 2021, resulting
in five operated wells drilled and
brought online.
Western North Slope
On the Western North Slope, we operate
the Colville River Unit, which includes the Alpine Field and
three satellite
fields: Nanuq, Fiord and Qannik.
The Alpine Field is located 34 miles west of the Kuparuk
Field.
Field installations
include one central production facility
which separates oil, natural
gas and water.
The Greater Mooses Tooth
Unit is the first unit established entirely
within the National Petroleum Reserve
Alaska
(NPR-A).
In 2017, we began construction
in the unit with two drill sites: Greater Mooses Tooth
#1 (GMT-1) and
Greater Mooses Tooth
#2 (GMT-2).
GMT-1 achieved
first oil in 2018 and completed drilling
in 2019.
In 2021, the
third and final construction season for
GMT-2 was successfully
completed,
and drilling operations commenced
during the second quarter.
First oil for GMT-2
was achieved in the fourth quarter
of 2021, as planned.
During 2021, we operated a conventional
rotary rig and an extended reach drilling rig
in the Western North Slope,
resulting in seven operated
wells drilled and brought online.
Business and Properties
ConocoPhillips
2021 10-K
Exploration
Appraisal of the Willow Discovery,
located 36 miles from Nuiqsut in the Bear Tooth
Unit in the NPR-A, was
conducted in 2020.
There was no appraisal activity
in 2021. In August 2021, an Alaska federal judge
vacated the
U.S. government’s
approval granted to
our planned Willow project previously approved
by the BLM in October
The Department of Justice did not appeal the decision and
neither did we.
We are actively supporting the
BLM and Department of Interior as they conduct
the Supplemental Environmental
Impact Statement process to
address issues highlighted by the federal
district court.
In the interim, we are continuing
with FEED work in service
of a final investment decision.
The Stony Hill 1 well located to
the east of the Greater Mooses Tooth
Unit within the NPR-A was plugged and
abandoned in 2021 and expensed as a dry hole.
A 3D seismic survey covering 234 square miles was
completed in 2020 on state
and federal lands.
We are currently
evaluating this seismic data for
future exploration opportunities.
In late 2021, the Coyote Brookian
topset exploration prospect
in the Kuparuk River Unit was tested
with a near
vertical sidetrack from an existing
wellbore.
The well was fracture stimulated
and will undergo well testing early in
2022 to confirm longer term deliverability.
Transportation
We transport the petroleum
liquids produced on the North Slope to Valdez,
Alaska through an 800-mile pipeline
that is part of Trans
-Alaska Pipeline System (TAPS).
We have a 29.5 percent
ownership interest
in TAPS, and we
also have ownership interests
in and operate the Alpine, Kuparuk
and Oliktok pipelines on the North Slope.
Our wholly owned subsidiary,
Polar Tankers,
Inc., manages the marine transportation
of our North Slope
production, using five company-owned, double
-hulled tankers, and charters
third-party vessels, as necessary.
The
tankers deliver oil from
Valdez, Alaska,
primarily to refineries on the west coast
of the U.S.
Lower 48
The Lower 48 segment consists of operations
located in the 48 contiguous U.S. states
and the Gulf of Mexico.
The
segment is organized into
the Permian and Gulf Coast and Rockies
business units with a portfolio of low cost of
supply, short
cycle time, resource-rich unconventional
plays, and conventional
production from legacy assets.
Based on 2021 production volumes, the Lower 48 is the company’s
largest segment and contributed
55 percent of
our consolidated liquids production and
64 percent of our consolidated natural
gas production.
In 2021, we completed two acquisitions
significantly increasing our Permian position
in the Lower 48.
On January
15, 2021, we completed the acquisition of Concho
adding complementary acreage across
the Delaware and
Midland basins.
On December 1, 2021, we completed the acquisition of Shell’s
Delaware Basin position adding
significant Texas
acreage in the Delaware Basin.
The accounting close date used for
reporting purposes of the Shell
transaction was December 31, 2021.
For additional information related
to these acquisitions,
Business and Properties
ConocoPhillips
2021 10-K
2021
Crude Oil
NGL
Natural Gas
Total
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Delaware Basin
Midland Basin
Permian—Other
Total
Permian
Eagle Ford
Bakken
Gulf Coast and Rockies—Other
Total
Gulf Coast and Rockies
Total
Lower 48
1,340
At December 31, 2021, we held 10.8 million net acres
of onshore conventional and
unconventional acreage in the
Lower 48, the majority of which is either held by production
or owned by the company.
Our unconventional
holdings total approximately
2 million net acres in the following areas:
●
560,000 net acres in the Bakken, located
in North Dakota and eastern
Montana.
●
200,000 net acres in the Eagle Ford,
located in South Texas.
●
654,000 net acres in the Permian—Delaware
Basin, located in West
Texas
and southeastern New Mexico.
●
266,000 net acres in the Permian—Midland Basin,
located in West Texas.
●
293,000 net acres in other areas with unconventional
potential.
The majority of our 2021 onshore production activities
were centered on continued
development of assets, with
an emphasis on areas with low cost of supply,
particularly in growing unconventional
plays. Our major focus in
2021 included the following areas:
●
Delaware Basin—We operated
six rigs and two frac crews on average
during 2021, resulting in 92
operated wells drilled and 95 operated
wells brought online.
Primarily as a result of our Concho
acquisition, production increased in 2021 compared
with 2020, averaging 286 MBOED and
79 MBOED,
respectively.
●
Midland Basin—We operated
five rigs and two frac crews on
average during 2021, resulting
in 118
operated wells drilled and 102 operated
wells brought online.
Primarily as a result of our Concho
acquisition, production increased in 2021 compared
with 2020, averaging 136 MBOED
and 6 MBOED,
respectively.
●
Eagle Ford—We operated
four rigs and two frac crews
on average in the Eagle Ford
during 2021, resulting
in 93 operated wells drilled and 160 operated
wells brought online.
Production increased in 2021
compared with 2020, averaging
211 MBOED and 186 MBOED, respectively.
●
Bakken—We operated
one rig and one frac crew for parts of the
year in the Bakken,
resulting in 6
operated wells drilled and 21 operated
wells brought online.
Production increased in 2021 compared
with 2020, averaging 94 MBOED and
78 MBOED, respectively.
Dispositions
In the second half of 2021, we completed the sale of certain
noncore assets in the Lower 48.
In January 2022, we
entered into an agreement
to sell our interests in
additional noncore assets in the Lower 48.
This transaction is
expected to close in the second quarter
of 2022.
Facilities
We operate and own,
with varying interests, centralized
condensate processing facilities
in Texas
and New Mexico
in support of our Eagle Ford, Delaware
and Midland assets.
Business and Properties
ConocoPhillips
2021 10-K
Canada
Our Canadian operations consist of the Surmont
oil sands development in Alberta and the liquids-rich Montney
unconventional play in
British Columbia.
In 2021, operations in Canada contributed
8 percent of our consolidated
liquids production and 4 percent of our consolidated
natural gas production.
2021
Crude Oil
NGL
Natural Gas
Bitumen
Total
Interest
Operator
MBD
MBD
MMCFD
MBD
MBOED
Average Daily Net
Production
Surmont
50.0
%
ConocoPhillips
-
-
-
Montney
100.0
ConocoPhillips
-
Total
Canada
Surmont
Our bitumen resources in Canada are produced
via an enhanced thermal oil recovery method called SAGD,
whereby steam is injected into
the reservoir,
effectively liquefying the heavy
bitumen, which is recovered and
pumped to the surface for further processing.
Operations include two central processing
facilities for treatment
and blending of bitumen.
At December 31, 2021, we held approximately
600,000 net acres of land in the
Athabasca Region of northeastern
Alberta.
The Surmont oil sands leases are located approximately
35 miles south of Fort McMurray,
Alberta.
Surmont is a
50/50 joint venture with Total
Energies SE that offers
long-lived, sustained production.
We are focused on
structurally lowering costs,
reducing GHG intensity and optimizing asset performance.
In 2021, we began processing a portion
of Surmont’s blended bitumen at the Diluent Recovery
Unit constructed in
Alberta, unlocking additional value for the
asset by providing market access
to our heavy crude oil.
In 2019, Surmont implemented the use of condensate
for bitumen blending through the central
processing facility
2; enabling the asset to lower blend ratio
and diluent supply costs, gain protection
from synthetic crude oil supply
disruptions and gain optionality on sales products.
The alternative blend project was
complete in October at
central processing facility 1.
Full Surmont Heavy Dilbit (condensate
bitumen blend) was produced across
both
facilities in the fourth quarter of 2021.
Montney
The Montney is an unconventional
resource play located
in northeastern British Columbia.
At December 31, 2021,
we held approximately 300,000
acres of land with 100 percent working interest
in the liquids-rich section of the
Montney.
In 2021, development activity consisted
of drilling three horizontal wells and
bringing 12 wells online.
In addition,
construction on the second phase of our processing
facility started.
Exploration
Our primary exploration focus
is assessing our Montney acreage.
In 2022, appraisal drilling and completions
activity within the Montney will continue to explore
the area’s
resource potential.
Additionally, we have
exploration acreage in the Mackenzie
Delta/Beaufort Sea Region and
the Arctic Islands.
Business and Properties
ConocoPhillips
2021 10-K
Europe, Middle East
and North Africa
The Europe, Middle East and North
Africa segment consists of operations
principally located in the Norwegian
sector of the North Sea; the Norwegian Sea; Qatar; Libya;
and terminalling operations in the U.K.
In 2021,
operations in Europe, Middle East
and North Africa contributed 12 percent of our consolidated
liquids production
and 14 percent of our consolidated natural
gas production.
Norway
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Greater Ekofisk Area
30.7-35.1
%
ConocoPhillips
Heidrun
24.0
Equinor
Aasta Hansteen
10.0
Equinor
-
-
Alvheim
20.0
Aker BP
-
Troll
1.6
Equinor
-
Visund
9.1
Equinor
Other
Various
Equinor
-
Total
Norway
The Greater Ekofisk Area is
located approximately
200 miles offshore Stavanger,
Norway,
in the North Sea, and
comprises four producing fields: Ekofisk,
Eldfisk,
Embla and Tor.
The Tor II redevelopment
achieved first
production in December 2020.
This project consisted of 8 wells that
have all been completed and brought
online
as of May 2021.
Crude oil is exported to Teesside,
England, and the natural gas is exported
to Emden, Germany.
The Ekofisk and Eldfisk fields consist
of several production platforms
and facilities, with development drilling
continuing over the coming years.
The Heidrun Field is located in the Norwegian Sea.
Produced crude oil is stored
in a floating storage unit and
exported via shuttle tankers.
Part of the natural gas
is currently injected into the reservoir for
optimization of
crude oil production, some gas is transported
for use as feedstock in a methanol
plant in Norway,
in which we own
an 18 percent
interest, and the remainder is transported
to Europe via gas processing terminals
in Norway.
Aasta Hansteen is a gas
and condensate field located in the Norwegian Sea.
Produced condensate is loaded
onto
shuttle tankers
and transported to market.
Gas is transported through the
Polarled gas pipeline to the onshore
Nyhamna processing plant for final processing
prior to export to market.
The Troll Field lies in the
northern part of the North Sea and consists of the Troll
A, B and C platforms.
The natural
gas from Troll
A is transported to Kollsnes,
Norway.
Crude oil from floating platforms Troll
B and Troll C is
transported to Mongstad,
Norway, for
storage and export.
The Alvheim Field is located in the northern part of the North
Sea near the border with the U.K. sector,
and
consists of a FPSO vessel and subsea installations.
Produced crude oil is exported via shuttle tankers,
and natural
gas is transported to the Scottish
Area Gas Evacuation (SAGE)
Terminal at
St. Fergus, Scotland, through
the SAGE
Pipeline.
Visund is an oil and gas field located in the North
Sea and consists of a floating drilling, production and processing
unit, and subsea installations.
Crude
oil is transported by pipeline to a nearby
third-party field for storage and
export via tankers.
The natural gas is transported
to a gas processing plant at Kollsnes,
Norway,
through the
Gassled transportation system.
We also have varying
ownership interests in two other
producing fields in the Norway sector of the North
Sea.
Business and Properties
ConocoPhillips
2021 10-K
Exploration
In 2021, we prepared for a four
well exploration and appraisal
campaign to take place in 2022.
Planned wells
include Slagugle appraisal and exploration
of the Peder,
Bounty and Lamba prospects.
We were awarded
two new exploration
licenses; PL1122 and PL1123; and two acreage additions,
PL891B and
PL1045B.
Transportation
We own a 35.1 percent interest
in the Norpipe Oil Pipeline System, a 220-mile pipeline which
carries crude oil from
Ekofisk to a crude oil stabilization
and NGLs processing facility in Teesside,
England.
Facilities
We operate and have
a 40.25 percent ownership interest
in a crude oil stabilization and NGLs processing
facility at
Teesside,
England to support our Norway operations.
Qatar
2021
Crude Oil
NGL
Natural
Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Qatargas Operating
QG3
30.0
%
Company Limited
QG3 is an integrated development
jointly owned by QatarEnergy (68.5 percent),
ConocoPhillips (30 percent) and
Mitsui & Co., Ltd. (1.5 percent).
QG3 consists of upstream natural
gas production facilities, which produce
approximately 1.4 billion gross
cubic feet per day of natural
gas from Qatar’s North
Field over a 25-year life, in
addition to a 7.8 million gross tonnes-per-year
LNG facility.
LNG is shipped in leased LNG carriers destined for
sale
globally.
QG3 executed the development
of the onshore and offshore assets
as a single integrated development
with
Qatargas 4 (QG4), a joint venture
between QatarEnergy and Shell plc.
This included the joint development of
offshore facilities situated
in a common offshore block in the North Field, as
well as the construction of two
identical LNG process trains and associated
gas treating facilities for both
the QG3 and QG4 joint ventures.
Production from the LNG trains
and associated facilities is combined and
shared.
Libya
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Waha Concession
16.3
%
Waha Oil Co.
-
The Waha Concession consists of multiple concessions
and encompasses nearly 13 million gross acres
in the Sirte
Basin.
In 2021, we had 22 crude liftings from Es Sider,
compared with five crude liftings from Es
Sider in 2020,
primarily due to the absence of a forced shutdown
after a period of civil unrest that ceased production
in 2020.
Business and Properties
ConocoPhillips
2021 10-K
Asia Pacific
The Asia Pacific segment has exploration
and production operations in China,
Indonesia, Malaysia and Australia
.
In
2021, operations in the Asia Pacific segment
contributed 6 percent of our consolidated
liquids production and 17
percent of our consolidated natural
gas production.
Australia
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
ConocoPhillips/
Australia Pacific LNG
37.5
%
Origin Energy
-
-
Australia Pacific LNG Pty Ltd
(APLNG), our joint venture with Origin Energy
Limited (37.5 percent) and China
Petrochemical Corporation
(Sinopec) (25 percent),
is focused on producing CBM from
the Bowen and Surat basins
in Queensland, Australia, to supply the
domestic gas market and convert
the CBM into LNG for export.
Origin
operates APLNG’s
upstream production and pipeline system,
and we operate the downstream
LNG facility,
located
on Curtis Island near Gladstone, Queensland, as well as
the LNG export sales business.
We operate two
fully subscribed 4.5-million-metric-tonnes-per-year
LNG trains.
Approximately 2,800 net wells
are
ultimately expected to supply both
the LNG sales contracts and domestic gas
market.
The wells are supported by
gathering systems,
central gas processing and
compression stations, water
treatment facilities and an
export
pipeline connecting the gas fields to the LNG facilities.
The LNG is being sold to Sinopec under 20-year sales
agreements for 7.6 million metric tonnes
of LNG per year,
and Japan-based Kansai Electric Power Co., Inc. under
a
20-year sales agreement for approximately
1 million metric tonnes of LNG per year.
In December 2021, the company announced it has
notified Origin Energy that it is exercising
its preemption right to
purchase an additional 10 percent shareholding
interest in APLNG from Origin Energy
for $1.645 billion, which will
be funded from cash on the balance sheet and subject
to customary adjustments.
The effective date of the
transaction is July 1, 2020 with closing anticipated
to occur in the first quarter of 2022 subject to
Australian
government approval.
There will be no change to the operational
structure of the APLNG joint venture,
whereby
Origin Energy will remain the upstream
operator of the natural
gas production and pipeline system,
and
ConocoPhillips Australia will remain the downstream
operator of the LNG facility.
For additional information,
and
Exploration
In 2019, we entered into an agreement
with 3D Oil to acquire a 75 percent interest
in and operatorship
of an
offshore Exploration Permit
(T/49P) located
in the Otway Basin, Australia.
We obtained an additional five percent
interest, increasing our interes
t
to 80 percent,
in June 2020.
A 3D seismic survey acquisition was completed in
October 2021, and this data will be evaluated
for future exploration
opportunities.
Indonesia
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
South Sumatra
%
ConocoPhillips
-
During 2021, we operated two PSCs in
Indonesia: the Corridor Block located in South Sumatra,
and Kualakurun in
Central Kalimantan.
Currently,
we have production from the Corridor
Block.
Business and Properties
ConocoPhillips
2021 10-K
Asset Sales
In December 2021, we announced an agreement to sell our
subsidiary that indirectly owns the company’s
percent interest in the Indonesia
Corridor Block PSC and a 35 percent shareholding interest
in the Transasia
Pipeline Company.
The effective date for
the transaction is January 1, 2021, with closing planned for
the first
quarter of 2022.
South Sumatra
The Corridor PSC consists of two oil fields and seven
producing natural gas fields.
Natural gas is supplied from the
Grissik and Suban gas processing plants
to the Duri steamflood in central Sumatra
and to markets in Singapore,
Batam and West Java.
In 2019, we were awarded a 20-year
extension, with new terms, of the Corridor PSC.
Under
these terms, we retain a majority interest
and continue as operator for
at least three years
after 2023 and retain a
participating interest until
Exploration
We entered into
the Central Kalimantan
Kualakurun Block PSC in 2015 with an exploration
period of six years.
We
completed the firm working commitment
program in 2017, which included satellite
mapping and a 740-kilometer
2D seismic acquisition program.
After completion of prospect evaluation,
both PSC contractors decided
to
relinquish rights and return this block to
the government.
The relinquishment was approved
by the government in
August 2021.
Transportation
We are a 35 percent owner of
a consortium company that has a 40 percent
ownership in PT Transportasi
Gas
Indonesia, which owns and operates the Grissik
to Duri and Grissik to Singapore natural
gas pipelines.
China
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Penglai
49.0
%
CNOOC
-
-
Penglai
The
Penglai
19-3,
19-9
and
25-6
fields
are
located
in
the
Bohai
Bay
Block
11/05
and
are
in
various
stages
of
development.
Phase 1 and 2 include production from all three
Penglai oil fields.
The
Phase
Project
in
the
Penglai
19-3
and
19-9
fields
consists
of
three
new
wellhead
platforms
and
a
central
processing
platform.
First
production
from
Phase
3 was
achieved
in
This
project
could
include
up
to
wells, 126 of which have been completed
and brought online as of December 2021.
The Phase 4A Project in the Penglai 25-6 field consists
of one new wellhead platform and achieved
first production
in 2020.
This project could include up to 62 new wells,
14 of which have been completed and
brought online as of
December 2021.
On April 5, 2021, a fire occurred on the non-operated
V platform in the Bohai Bay.
On April 6, 2021, the fire was
extinguished.
We worked with
the operator and implemented a
recovery plan resulting in production
resumption
in December 2021.
Exploration
During 2021, exploration activities in
the Penglai fields consisted of two successful
appraisal wells supporting
future developments in the Bohai Bay
Block 11/05.
Business and Properties
ConocoPhillips
2021 10-K
Malaysia
2021
Crude Oil
NGL
Natural Gas
Total
Interest
Operator
MBD
MBD
MMCFD
MBOED
Average Daily Net Production
Gumusut
29.5
%
Shell
-
-
Malikai
35.0
Shell
-
-
Kebabangan (KBB)
30.0
KPOC
-
Siakap North-Petai
21.0
PTTEP
-
-
Total
Malaysia
-
We have varying stages
of exploration, development and
production activities across approx
imately 2.7 million net
acres in Malaysia, with working interests
in six PSCs.
Four of these PSCs are located in waters
off the eastern
Malaysian state
of Sabah: Block G, Block J, the Kebabangan Cluster
(KBBC), which we do not operate, and
Block
SB405, an operated exploration
block acquired in 2021.
We also operate another
two exploration blocks,
Block
WL4-00 and Block SK304, in waters off the
eastern Malaysian state
of Sarawak.
Block J
Gumusut
We currently have
a 29.5 percent working interest
in the unitized Gumusut Field.
Gumusut Phase 2 first oil was
achieved in 2019.
Development drilling associated
with Gumusut Phase 3, a four-well program,
is planned to
commence in the first quarter of 2022.
First oil is anticipated in 2022.
KBBC
The KBBC PSC grants us a 30 percent working interest
in the KBB, Kamunsu East and
Kamunsu East Upthrown
Canyon gas and condensate
fields.
In 2020, we recognized dry hole expense
and impaired the associated carrying
value of unproved properties in
the Kamunsu East Field that is no
longer in our development plans.
KBB
During 2019, KBB tied-in to a nearby third-party
floating LNG vessel which provided increased
gas offtake capacity.
Production from the field has been reduced since Janu
ary 2020, due to the rupture of a third-party pipeline which
carries gas production from KBB to
one of its markets.
The pipeline operator has initiated
repairs and is working
toward pipeline testing during 2022.
Block G
Malikai
We hold a 35 percent working
interest in Malikai.
This field achieved first production
in December 2016 via the
Malikai Tension
Leg Platform, ramping to
peak production in 2018.
The KMU-1 exploration well was completed
and started producing through
the Malikai platform in 2018.
Malikai Phase 2 development first
oil was achieved in
February 2021.
Siakap North-Petai
We hold a 21 percent working
interest in the unitized Siakap
North-Petai (SNP) oil field.
First oil from SNP Phase 2
was achieved in November 2021.
Exploration
In 2017, we were awarded operatorship
and a 50 percent working interest
in Block WL4-00, which included the
existing Salam-1 oil discovery and encompassed
0.6 million gross acres.
In 2018 and 2019, two exploration and
two appraisal wells were drilled,
resulting in oil discoveries under evaluation
at Salam and Benum, while two
Patawali wells were expensed
as dry holes in 2019.
Further exploration and appraisal
drilling is planned for 2022.
In 2018, we were awarded a 50 percent
working interest and operatorship
of Block SK304 encompassing 2.1
million gross acres off the coast
of Sarawak,
offshore Malaysia.
We acquired 3D seismic over the acreage
and
completed processing of this data
in 2019.
Exploration drilling is planned for 2022.
Business and Properties
ConocoPhillips
2021 10-K
In February 2021, we were awarded
operatorship and an 85 percent
working interest in Block SB405 encompassing
1.4 million gross acres off the coast
of Sabah, offshore Malaysia.
Acquisition of a 3D seismic survey over the
acreage is planned for 2022.
Other International
The Other International segment includes activities
in Colombia as well as contingencies associated
with prior
operations in other countries.
As a result of our completed Concho acquisition
on January 15, 2021, we refocused
our exploration program
and announced our intent to pursue
a managed exit from certain areas.
Colombia
We have an 80 percent
operated interest
in the Middle Magdalena Basin Block VMM-3 extending
over
approximately 67,000 net acres.
In addition, we have an 80 percent working
interest in the VMM-2 Block which
extends over approximately
58,000 net acres and is contiguous to
the VMM-3 Block.
The blocks are currently in
Force Majeure following a preliminary
injunction temporarily suspending hydraulic
fracturing activities.
Argentina
On September 16, 2021, ConocoPhillips Petroleum
Holdings BV signed and closed the sale of shares
in
ConocoPhillips Argentina Holdings
Sarl and ConocoPhillips Argentina Ventures
SRL.
With this transaction,
we
completed the exit from our Argentina
holdings.
Venezuela
For discussion of our contingencies in Venezuela,
Other
Marketing Activities
Our Commercial organization
manages our worldwide commodity portfolio,
which mainly includes natural gas,
crude oil, bitumen, NGLs and LNG.
Marketing activities are performed
through offices in the U.S., Canada, Europe
and Asia.
In marketing our production, we attempt
to minimize flow disruptions, maximize
realized prices and
manage credit-risk exposure.
Commodity sales are generally made at
prevailing market prices at
the time of sale.
We also purchase and sell third
-party volumes to better position the company
to satisfy customer demand while
fully utilizing transportation and storage
capacity.
Natural Gas
Our natural gas production,
along with third-party purchased gas, is primarily marketed
in the U.S., Canada and
Europe.
Our natural gas is sold to a diverse
client portfolio which includes local distribution
companies; gas and
power utilities; large industrials; independent,
integrated or state
-owned oil and gas companies; as well as
marketing companies.
To reduce
our market exposure and
credit risk, we also transport natural
gas via firm and
interruptible transportation
agreements to major market hubs.
Crude Oil, Bitumen and Natural Gas Liquids
Our crude oil, bitumen and NGL revenues are derived from
production in the U.S., Canada, Asia, Africa and
Europe.
These commodities are primarily sold under contracts
with prices based on market indices, adjusted
for location,
quality and transportation.
LNG
LNG marketing efforts are
focused on equity LNG production
facilities located in Australia
and Qatar.
LNG is
primarily sold under long-term contracts with
prices based on market indices.
Business and Properties
ConocoPhillips
2021 10-K
Energy Partnerships
Marine Well Containment
Company (MWCC)
We are a founding member of
the MWCC, a non-profit organization
formed in 2010, which provides well
containment equipment and technology
in the deepwater U.S. Gulf of Mexico.
MWCC’s containment
system
meets the U.S. Bureau of Safety
and Environmental Enforcement
requirements for a subsea well
containment
system that can respond
to a deepwater well control
incident in the U.S. Gulf of Mexico.
Oil Spill Response Limited (OSRL) - Subsea Well
Intervention Service (SWIS)
OSRL-SWIS is a non-profit organization
in the U.K. that is an industry funded joint initiative
providing the capability
to respond to subsea well-control
incidents.
Through our SWIS subscription, ConocoPhillips
has access to
equipment that is maintained and stored
in a response ready state.
This provides well capping and containment
capability outside the U.S.
Oil Spill Response Removal Organizations
(OSROs)
We maintain memberships
in several OSROs across the
globe as a key element of our preparedness
program in
addition to internal response resources.
Many of the OSROs are not-for-profit
cooperatives owned by
the member
companies wherein we may actively
participate as a member of the board of directors,
steering committee, work
group or other supporting role.
In North America, our primary OSROs include the Marine Spill Response
Corporation for the continental
U.S. and Alaska Clean Seas and Ship Escort/Response
Vessel System
for the Alaska
North Slope and Prince William Sound, respectively.
Internationally,
we maintain memberships in
various OSROs
including Oil Spill Response Limited, the Norwegian Clean Seas
Association for Operating Companies,
Australian
Marine Oil Spill Center and Petroleum
Industry of Malaysia Mutual Aid Group.
Technology
We have several
technology programs that
improve our ability to develop
unconventional reservoirs,
increase
recoveries from our legacy fields,
improve the efficiency of our exploration
program, produce heavy
oil
economically with less emissions and implement sustainability
measures.
In early 2021, we established a multi-disciplinary Low
Carbon Technologi
es organization to
support the company’s
net-zero road
map for scope 1 and 2 emissions, understand
the new energies landscape, and prioritize
opportunities for future competitive investment.
Throughout 2021, we executed
emissions reduction projects
across our global portfolio including production
efficiency measures and methane and flaring reductions.
We also
completed pre-development
work to evaluate large scale
wind energy opportunities to power our operations
in
the Permian, North Sea and Bohai Bay.
Within the new energies landscape, the company
has prioritized
opportunities in CCUS and hydrogen.
In 2021, CO2 storage sites
were evaluated along the Texas
and Louisiana
Gulf Coast and we initiated activities to
provide carbon capture and storage
to industrial emitters.
2021 also saw
early investments in enabling hydrogen
technologies and we began evaluating
hydrogen opportunities
in both
domestic and international markets
.
We are the second-largest
LNG liquefaction technology provider
globally.
Our Optimized Cascade
®
LNG
liquefaction technology has been licensed for
use in 27 LNG trains around the world, with feasibility
studies
ongoing for additional trains.
Business and Properties
ConocoPhillips
2021 10-K
Delivery Commitments
We sell crude oil and natural
gas from our producing operations
under a variety of contractual arrangements,
some of which specify the delivery of a fixed and determinable
quantity.
Our commercial organization
also enters
into natural gas sales
contracts where the source of the natural
gas used to fulfill the contract can
be the spot
market or a combination of our reserves
and the spot market.
Worldwide, we are contractually
committed to
deliver approximately 1.3 trillion
cubic feet of natural gas
and 159 million barrels of crude oil in the future.
These
contracts have various
expiration dates through
the year 2030.
We expect to fulfill these delivery
commitments
with third-party purchases, as supported
by our gas management agreements; proved
developed reserves; and
PUDs.
See the disclosure on “Proved Undeveloped
Reserves” in the “Supplementary Data
- Oil and Gas
Operations” section following
the Notes to Consolidated Financial Statements,
for information on the
development of PUDs.
Competition
ConocoPhillips is one of the world’s
leading E&P companies based on both production and reserves,
with a globally
diversified asset portfolio.
We compete with private,
public and state-owned companies
in all facets of the E&P
business.
Some of our competitors are larger
and have greater resources.
Each of our segments is highly
competitive, with no single competitor,
or small group of competitors,
dominating.
We compete with numerous
other companies in the industry,
including state-owned companies,
to locate and
obtain new sources of supply and to produce
oil, bitumen, NGLs and natural gas
in an efficient, cost-effective
manner.
We deliver our production into
the worldwide commodity markets.
Principal methods of competing
include geological, geophysical
and engineering research and technology; experience
and expertise; economic
analysis in connection with portfolio management;
and safely operating
oil and gas producing properties.
Human Capital Management
Values, Principles and Governance
At ConocoPhillips, our human capital
management (HCM) approach is anchored
to our core SPIRIT Values.
Our
SPIRIT Values – Safety,
People, Integrity,
Responsibility,
Innovation, and Teamwork
– set the tone for how we
interact with all of our internal and
external stakeholders.
In particular, we
believe a safe organization
is a
successful organization,
so we prioritize personal and process
safety across the company.
Our SPIRIT Values are a
source of pride.
Our day-to-day work is guided by
the principles of accountability and performance,
which means
the way we do our work is as important
as the results we deliver.
We believe these core values
and principles set
us apart, align our workforce and provide
a foundation for our culture.
Our Executive Leadership Team
(ELT) and our Board
of Directors play a key
role in setting our HCM strategy
and
driving accountability for meaningful
progress.
The ELT and Board
of Directors engage often
on workforce-related
topics.
Our HCM programs are overseen
and administered by our human resources
function with support from
business leaders across the company.
We depend on our workforce
to successfully execute our
company’s strategy
and we recognize the importance of
creating a workplace in which our people feel valued.
Our HCM programs are built around
three pillars that we
believe are necessary for success: a compelling
culture, a world-class workforce
and strong external engagement.
Each of these pillars is described in more detail
below.
A Compelling Culture
How we do our work is what sets us apart and drives
our performance.
We’re experts
in what we do and
continuously find ways to
do our jobs better.
Together,
we deliver strong performance,
but not at all costs.
We
embrace our core cultural attributes
that are shared by everyone,
everywhere.
With two significant acquisitions
completed in 2021, we prioritized cultural
integration. We
seized the opportunity to learn from and value
each
other’s cultures.
This involved employee engagement,
active listening and leveraging
data analytics to monitor key
workforce and engagement
metrics.
Business and Properties
ConocoPhillips
2021 10-K
Health, Safety and Environment
Our HSE organization sets
expectations and provides tools
and assurance to our workforce to
promote and achieve
HSE excellence.
We manage and assure
ConocoPhillips HSE policies, standards
and practices, to help ensure
business activities are consistently
safe, healthy and conducted
in an environmentally and socially
responsible
manner across the globe.
Each business unit manages its local operational
risks with particular attention
to
process safety,
occupational safety and environmental
and emergency preparedness risk.
Objectives, targets and
deadlines are set and tracked
annually to drive strong HSE performance.
Progress is tracked
and reported to our
ELT and the Board
of Directors. HSE audits are conducted
on business units and staff groups
to ensure
conformance with ConocoPhillips
HSE policies, standards and practices
where improvement actions
are identified
and tracked to completion.
We continuously look for
ways to operate more
safely,
efficiently and responsibly.
We focus on reducing human
error by emphasizing interaction
among people, equipment and work processes
.
By being curious about how work
is done, recognizing error-likely
situations and applying safeguards
,
we can reduce the likelihood and severity
of
unexpected incidents. We conduct
thorough investigations
of all serious incidents to understand
the root cause
and share lessons learned globally to improve
our procedures, training, maintenance
programs and designs.
Through this culture of continuous
learning and improvement, we continue
to refine
our existing HSE processes
and tools and enhance
our commitment to safe, efficient
and responsible operations.
COVID-19 Response
In 2021, our COVID-19 activities were guided by
our three company-wide priorities, set at
the early pandemic
stages: protect our employees
and contractors,
mitigate the spread of COVID-19 and safely
run the business.
We
have pursued these priorities via a coordinated
crisis management support team, frequent workforce
communications and flexible programs
to suit the challenging environment.
Our office and field staffs adhered
to
rigorous mitigation protocols
implemented across our operations
utilizing the most current guidance from health
authorities. Mitigation measures, including
requirements for remote
work, vaccines and testing were
driven by the
specific situations applicable to a region or business
function.
These measures proved effective
at lessening the
impact to our employees and contractors
,
mitigating the spread of COVID-19 and minimizing
the potential for
business disruption.
Diversity, Equity and
Inclusion (DEI)
At ConocoPhillips, we value all forms
of diversity,
provide equitable employee programs
and promote a culture of
inclusion.
Our DEI vision is for our workforce to have
a strong sense of belonging and feel
supported in meeting
their full potential.
Our commitment to DEI is foundational
to our SPIRIT Values.
We hold our leaders accountable
for having personal DEI goals
each year and encourage all global employees
to play a part in creating and
sustaining an inclusive work environment.
The ELT has ultimate
accountability for advancing
our DEI commitment through a governance
structure that
includes an ELT
-level DEI Champion, a global DEI Council consisting
of senior leaders from across the company
and
organization-wide DEI goals.
The company sets goals and measures progress
based on three pillars that guide our
DEI activities:
leadership accountability,
employee awareness and processes
and programs.
In addition, our DEI
plans and progress are reviewed
regularly with the Board of Directors.
In 2021, HR and the DEI Council reviewed the results of the
2020 Perspectives Pulse DEI employee
survey and
prioritized action plans tied to employee sentiment.
2021 accomplishments included:
●
Refreshing and diversifying
the global DEI Council to reflect the diversity
we seek across our global
organization;
●
Using survey insights to produce six multi-year
corporate DEI priorities that
will guide us through 2024;
●
Developing a detailed plan for our
corporate DEI priorities, made up of 18 specific
targets that position us
to deliver meaningful progress through
2024; and
●
Championing the addition of the ‘E’ (equity) to D&I; emphasizing the importance
of providing equitable
programs that lead to fair
outcomes for all employees.
Business and Properties
ConocoPhillips
2021 10-K
We actively monitor diversity
metrics on a global basis.
In 2021, we expanded our internal and external
workforce
metrics and HCM disclosures, including publishing
our 2018-2020 Consolidated EEO-1 Reports
and our inaugural
HCM report.
Tables of 2021 employee
demographics by gender and ethnicity,
and by country,
are shown below:
2021 Employees by Gender and Race/Ethnicity
Global
U.S.
Male
Female
White
POC
All Employees
%
%
%
%
All Leadership
Top Leadership
Junior Leadership
*"POC" refers to People of Color or racial and ethnic minorities self-reported in the U.S.
2021 Employees by Country
Percent of Total
U.S.
%
Norway
Canada
Indonesia
Great Britain
Australia
China
Other Global Locations
The Hybrid Office Work Program
In 2021, we introduced the Hybrid Office Work
(HOW) program in the U.S., offering
a combination of work from
both office and home.
The HOW program blends the advantages
of in-person engagement with individual
flexibility for eligible employees
where a hybrid schedule is feasible.
The design of the U.S. program was
adopted
in many of our global locations.
A World-Class Workforce
Our HCM approach addresses programs
and processes necessary for ensuring
we have an engaged workforce
with
the skills to meet our business needs.
We take a holistic
view of HCM that addresses each of the critical
components of workforce planning.
These are described in more detail below.
Recruitment
Our continued success requires a strong
global workforce that can contribute
the right skills, in the right places, to
achieve our strategic objectives.
We offer university
internships across multiple disciplines to
attract the best
early-career talent.
We partner with top diversity
organizations and universities,
including Hispanic-serving
organizations and historically
black colleges and universities.
We also recruit experienced
hires to fill critical skills
and maintain a broad range
of expertise and experience.
We conduct routine talent
assessments with leaders to
ensure we have the organizational
capacity and capabilities to execute
our business plans.
We have taken
significant steps to embed inclusion
into each step of our recruiting practices,
including adapting the way we
construct job descriptions to using intentionally
diverse interview panels.
As necessary, we closely
monitor recruitment metrics through
our internal university and experienced
hire
dashboards and track voluntary
turnover metrics to guide our retention
activities.
Business and Properties
ConocoPhillips
2021 10-K
2021 Hiring & Attrition Metrics
Percent of Total
U.S. University hire acceptance
%
U.S. Interns acceptance
Diversity hiring - Women
Diversity hiring - U.S. POC
Total
voluntary attrition
Employee Engagement and Development
We focus on the engagement
and development of our workforce
and encourage our employees
to build diverse
and fulfilling careers
with ConocoPhillips.
Our workforce is trained through
a combination of on-the-job learning,
formal training, regular feedback
and mentoring.
Skill-based Talent
Management Teams
(TMTs) guide employee
development and career progression
by skills and location.
The TMTs help identify our
future business needs and
assess the availability of critical skill-sets
within the company.
We use a performance management program
focused on objectivity,
credibility and transparency.
The program includes broad stakeholder
feedback, real-time
recognition and a formal “how” rating to
assess behaviors to ensure they
align with our SPIRIT Values.
We empower our employees
to grow their careers through
personal and professional development
opportunities,
including individual development plans, a voluntary
360-feedback tool and training
on a broad range of technical
and professional skills.
Succession planning is a top priority for management and
the board.
This work ensures we
have the talent available
for future leadership roles to
inspire employees to reach their ultimate
potential and limit
business interruption.
Taking steps
to measure and assess employee satisfaction
and engagement is at the heart of long-term
business
success and creating a great place to work
for our global workforce.
Since 2019, the ConocoPhillips Perspectives
Survey has become our primary listening platform
for gathering feedback on
employee sentiment and promot
ing
our “Who We Are”
culture.
Our leadership reviews feedback
gathered to guide priorities and goals.
Our employee
feedback strategy is
comprised
of an annual engagement survey and
an annual shorter DEI pulse survey.
Compensation, Benefits and Well-Being
We offer competitive,
performance-based compensation packages
and have global equitable pay practices.
Our
compensation programs are
generally comprised of a base pay
rate, the annual Variable
Cash Incentive Program
(VCIP) and, for eligible employees, the Restricted
Stock Unit (RSU) program.
From the CEO to the frontline
worker,
every employee participates in VCIP,
our annual incentive program, which aligns
employee compensation with
ConocoPhillips’ success on critical performance metrics
and also recognizes individual
performance.
Our RSU
program is designed to attract
and retain employees, reward
performance and align employee interest
with
stockholders by encouraging
stock ownership.
Our retirement and savings
plans are intended to support
employee’s
financial futures and are competitive within local
markets.
We routinely benchmark our global compensation
and benefits programs to ensure
they are competitive,
inclusive, aligned with company culture
and allow our employees to meet their individual needs
and the needs of
their families.
We provide flexible work
schedules and competitive time off,
including parental leave policies in
many locations.
In 2021, we enhanced our programs to
provide expanded coverage
for families requiring disability
support, elder care and childcare.
We also provide access to
quality childcare, including onsite child care,
where
access locally is a challenge.
Our global wellness programs include biometric screenings
and fitness challenges designed to educate
and
promote a healthy lifestyle.
All employees have access to
our employee assistance program,
and many of our
locations offer custom programs
to support mental well-being.
Business and Properties
ConocoPhillips
2021 10-K
Compensation Risk Mitigation
We have considered
the risks associated with each of its executive
and broad-based compensation programs
and
policies.
As part of the analysis, we considered the performance
measures we use as well as the different
types of
compensation, varied performance measurement
periods and extended vesting schedules
that we utilize under
each incentive compensation program.
As a result of this review,
management concluded that the risks
arising
from our compensation policies and practices
are not reasonably likely to
have a material adverse
effect on the
company.
As part of the Board of Directors’ oversight
of our risk management programs,
the Human Resources
Compensation Committee (HRCC) conducts
a similar review with the assistance of its
independent compensation
consultant.
The HRCC agrees with management’s
conclusion that the risks arising from our
compensation policies
and practices are not reasonably likely
to have a material adverse
effect on the company.
External Engagement
Our employees make our communities
stronger.
We are proud to
support their generous involvement
in local
charitable activities through employee giving programs
that include United Way
campaigns, matching gift
contributions and volunteer grants.
While we have been recognized
for our ESG and DEI efforts,
we know that it takes ongoing commitment
to make
sustainable progress;
therefore,
we continue to provide training,
build awareness and reinforce
accountability at
all levels of the organization
and focus on behaviors and processes
that build an environment in which everyone
has the opportunity to succeed.
General
At the end of 2021, we held a total of 1,118 active
patents in 50 countries worldwide, including
438 active U.S.
patents.
During 2021, we received 40 patents in
the U.S. and 45 foreign patents.
Our products and processes
generated licensing revenues
of $65 million related to activity in 2021.
The overall profitability of any
business
segment is not dependent on any single patent,
trademark, license, franchise or concession.
The environmental information
contained in Management’s
Discussion and Analysis of Financial Condition and
Results of Operations on pages 58 through
63 under the captions “Environmental”
and “Climate Change” is
incorporated herein by
reference.
It includes information on expensed
and capitalized environmental
costs for
2021 and those expected for 2022 and 2023.
Website Access to SEC Reports
Our internet website address
is
.
Information contained on our
internet website is not
part of this report on Form 10-K.
Our Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q, Current Reports on Form 8-K and any
amendments to these reports filed or furnished pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 are available on our website, free
of charge, as soon as reasonably practicable
after such reports are filed
with, or furnished to, the SEC.
Alternatively,
you may access these reports at
the SEC’s website at
.
Risk Factors
ConocoPhillips
2021 10-K