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 13 countries. Our diverse, low cost of supply portfolio includes resource-rich unconventional plays in North America; conventional assets in North America, Europe, Africa and Asia; LNG developments; oil sands assets in Canada; and an inventory of global exploration prospects. On December 31, 2022, we employed approximately 9,500 people worldwide and had total assets of about $94 billion. Total company production for the year was 1,738 MBOED.
ConocoPhillips was incorporated in the state of Delaware in 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.
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, see Note 24.
ConocoPhillips 2022 10-K
2
Business and PropertiesTable of Contents
We explore for, produce, transport and market crude oil, bitumen, natural gas, LNG and NGLs on a worldwide basis. At December 31, 2022, our operations were producing in the U.S., Norway, Canada, Australia, Malaysia, Libya, China and Qatar.
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 84 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 312022
2021
2020
Crude oil
Consolidated operations2,975 2,964 2,051
Equity affiliates93 63 68
Total Crude Oil3,068 3,027 2,119
Natural gas liquids
Consolidated operations845 644 340
Equity affiliates50 33 36
Total Natural Gas Liquids895 677 376
Natural gas
Consolidated operations1,461 1,523 1,011
Equity affiliates959 617 621
Total Natural Gas2,420 2,140 1,632
Bitumen
Consolidated operations216 257 332
Total Bitumen216 257 332
Total consolidated operations5,497 5,388 3,734
Total equity affiliates1,102 713 725
Total company6,599 6,101 4,459
3
ConocoPhillips 2022 10-K
Business and PropertiesTable of Contents
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 operate Kuparuk in addition to several fields on the Western North Slope, in which we have 100 percent interest. Additionally, we are one of Alaska's largest owners of state, federal and fee exploration leases, with approximately 1.2 million net undeveloped acres at year-end 2022. Alaska operations contributed 16 percent of our consolidated liquids production and two percent of our consolidated natural gas production.
2022
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Greater Prudhoe Area36.1 %Hilcorp67 17 32 90
Greater Kuparuk Area89.2-94.7ConocoPhillips66 - 1 66
Western North Slope100.0ConocoPhillips44 - 1 44
Total Alaska177 17 34 200
Greater Prudhoe Area
The Greater Prudhoe Area includes the Prudhoe Bay Unit, which consists of 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. Activity in 2022 consisted of rotary and coil tubing drilling throughout the year.
Greater Kuparuk Area
We operate the Greater Kuparuk Area, which includes the Kuparuk River Unit, consisting 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 wellbores utilizing coiled-tubing drilling.
ConocoPhillips 2022 10-K
4
Business and PropertiesTable of Contents
Western North Slope
On the Western North Slope, we operate the Colville River Unit and the Greater Mooses Tooth Unit.
The Colville River Unit includes the Alpine Field and three satellite fields: Nanuq, Fiord and Qannik, which are located approximately 34 miles west of the Kuparuk Field. Field installations include one central production facility which separates oil, natural gas and water. In May 2022, Fiord West Kuparuk achieved first production.
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 phases: Greater Mooses Tooth #1 (GMT1) and Greater Mooses Tooth #2 (GMT2). GMT1 achieved first oil in 2018 and completed drilling in 2019. First oil for GMT2 was achieved in late 2021.
2022 activity on the Western North Slope consisted of rotary and extended reach drilling throughout the year.
Exploration
Appraisal activities of the Willow Discovery in the Bear Tooth Unit in the NPR-A concluded in 2020. A Final Supplemental Environmental Impact Statement was released on February 1, 2023 and published in the Federal Register on February 3, 2023, with a record of decision to follow no sooner than 30 days afterwards.
We continued evaluating the Narwhal trend throughout 2022, purchasing additional seismic data and drilling a second injector well to allow a fully supported production test. We are planning future Narwhal development from the existing Alpine CD4 infrastructure to help inform the design and optimization of the future CD8 pad.
We plan to drill the Bear-1 exploration well at a location 30 miles south of the Kuparuk River Unit and east of the Colville River on state lands in early 2023. The well will test the Brookian topset play.
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 tested in early 2022. We are planning further appraisal drilling in 2023.
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.
5
ConocoPhillips 2022 10-K
Business and PropertiesTable of Contents
Lower 48
The Lower 48 segment consists of operations located in the 48 contiguous U.S. states and the Gulf of Mexico, with a portfolio mainly consisting of low cost of supply, short cycle time, resource-rich unconventional plays and commercial operations. Based on 2022 production volumes, the Lower 48 is the company's largest segment and contributed 64 percent of our consolidated liquids production and 72 percent of our consolidated natural gas production.
2022
Crude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Delaware Basin258 114 752 498
Eagle Ford117 58 271 220
Midland Basin91 31 196 155
Bakken59 15 127 95
Other*9 3 56 21
Total Lower 48534 221 1,402 989
*Other also includes select noncore assets that were divested in 2022.
At December 31, 2022, we held 10.3 million net acres of onshore unconventional and conventional acreage in the Lower 48, the majority of which is either held by production or owned by the company. Our significant unconventional holdings are in the following areas:
•659,000 net acres in the Delaware Basin, located in West Texas and southeastern New Mexico.
•199,000 net acres in the Eagle Ford, located in South Texas.
•251,000 net acres in the Midland Basin, located in West Texas.
•560,000 net acres in the Bakken, located in North Dakota and eastern Montana.
The majority of our 2022 production activities were centered on continued development of onshore assets, with an emphasis on areas with low cost of supply, particularly in growing unconventional plays. Our major focus in 2022 included the following areas:
•Delaware Basin-We operated ten rigs and three frac crews on average during 2022, resulting in 186 operated wells drilled and 153 operated wells brought online. We also participated in partner operated wells. Production increased in 2022 compared with 2021 primarily related to our Shell Permian acquisition, averaging 498 MBOED and 286 MBOED, respectively.
•Eagle Ford-We operated six rigs and three frac crews on average during 2022, resulting in 125 operated wells drilled and 153 operated wells brought online. Production increased in 2022 compared with 2021, averaging 220 MBOED and 211 MBOED, respectively.
•Midland Basin-We operated five rigs and two frac crews on average during 2022, resulting in 99 operated wells drilled and 111 operated wells brought online. Production increased in 2022 compared with 2021, averaging 155 MBOED and 136 MBOED, respectively.
•Bakken-We operated two rigs and one frac crew on average during 2022, resulting in 33 operated wells drilled and 43 operated wells brought online. We also participated in partner operated wells. Production increased in 2022 compared with 2021, averaging 95 MBOED and 94 MBOED, respectively.
Acquisitions and Dispositions
Throughout 2022, we completed sales of certain noncore assets, executed multiple acreage swaps and completed an acquisition that cored up acreage in Eagle Ford. See Note 3.
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.
ConocoPhillips 2022 10-K
6
Business and PropertiesTable of Contents
Canada
Our Canadian operations consist of the Surmont oil sands development in Alberta and the liquids-rich Montney unconventional play in British Columbia and commercial operations. In 2022, operations in Canada contributed six percent of our consolidated liquids production and three percent of our consolidated natural gas production.
2022
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDBitumenMBDTotalMBOED
Average Daily Net Production
Surmont50.0 %ConocoPhillips- - - 66 66
Montney100.0ConocoPhillips6 3 61 - 19
Total Canada6 3 61 66 85
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, 2022, 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 keeping facilities full, structurally lowering costs, reducing GHG intensity and optimizing asset performance.
In 2022, we began construction on the asset's next pad (Pad 267), which included the drilling of 24 well pairs. First production on Pad 267 is expected in early 2024.
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 additional 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 completed in 2021 at central processing facility 1. Full Surmont Heavy Dilbit (condensate bitumen blend) was first 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, 2022, we held approximately 300,000 acres of land with 100 percent working interest in the liquids-rich section of the Montney.
In 2022, development activity consisted of drilling 17 horizontal wells and bringing 12 wells online. In addition, we are progressing development of additional pads along with construction on the second phase of our processing facility with start-up scheduled for the third quarter of 2023.
Exploration
Our primary exploration focus is assessing our Montney acreage. In 2023, appraisal drilling and completions activity within the Montney will continue to explore the area's resource potential.
7
ConocoPhillips 2022 10-K
Business and PropertiesTable of Contents
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 commercial and terminalling operations in the U.K. In 2022, operations in Europe, Middle East and North Africa contributed nine percent of our consolidated liquids production and 17 percent of our consolidated natural gas production.
Norway
2022
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Greater Ekofisk Area30.7-35.1%ConocoPhillips43 2 37 51
Heidrun24.0 Equinor11 - 42 19
Aasta Hansteen10.0 Equinor- - 84 14
Troll1.6 Equinor1 - 62 12
Visund9.1 Equinor2 1 50 11
Alvheim20.0 Aker BP8 - 14 10
OtherVariousEquinor6 - 17 8
Total Norway71 3 306 125
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. Crude oil is exported to our operated terminal located at 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. Currently there are two development projects, Tommeliten A and Eldfisk North within the Greater Ekofisk Area. These subsea developments will be tied back to Ekofisk and Eldfisk respectively, with first production expected in 2024. Additionally in 2022, we received a 20-year extension on our production licenses in the Greater Ekofisk Area until 2048.
The Heidrun Field is located in the Norwegian Sea. Produced crude oil is stored in a floating storage unit and exported via shuttle tankers. Most of the gas is transported to Europe via gas processing terminals in Norway with some reinjected for pressure support if required. A portion of the gas is also transported for use as feedstock in a methanol plant in Norway, in which we have an 18 percent interest.
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.
ConocoPhillips 2022 10-K
8
Business and PropertiesTable of Contents
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.
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. The Kobra East Gekko (KEG) project, a new subsea tieback to the Alvheim FPSO, is currently being developed, with first production expected in 2024.
We also have varying ownership interests in two other producing fields in the Norway sector of the North Sea.
Exploration
In 2022, we executed a four-well exploration and appraisal campaign which included the Slagugle appraisal well and exploration of the Peder, Bounty and Lamba prospects. Additionally in 2022, we participated in the Othello partner operated exploration well. None of the exploration wells resulted in commercial discovery of hydrocarbons, and all were permanently plugged and abandoned. Slagugle is a discovery that we are continuing to evaluate. In 2022, we were awarded three new exploration licenses, PL1146, PL1163, and PL1166, and executed a trade to enter license PL1099.
Transportation
We have 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.
9
ConocoPhillips 2022 10-K
Business and PropertiesTable of Contents
Qatar
2022
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
QG330.0 %Qatargas Operating Company Limited13 8 374 83
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.
During 2022 we were awarded a 25 percent interest in each of two new joint ventures with QatarEnergy that will participate in the North Field East (NFE) and North Field South (NFS) LNG projects. Formation of the NFE joint venture (QG8) closed in December 2022 and we anticipate that the formation of the NFS joint venture (QG12) will close in early 2023. See Note 3 and Note 4.
Libya
2022
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Waha Concession20.4 %Waha Oil Co.36 - 22 40
The Waha Concession consists of multiple concessions for exploration and production activity and encompasses nearly 13 million gross acres onshore in the Sirte Basin. In 2022, we had 26 crude liftings from Es Sider terminal.
In November 2022, ConocoPhillips and TotalEnergies completed the joint acquisition of Hess Libya Waha Ltd., which increased our interest in the Waha Concession by 4.1 percent to 20.4 percent.
ConocoPhillips 2022 10-K
10
Business and PropertiesTable of Contents
Asia Pacific
The Asia Pacific segment has exploration and production operations in China, Malaysia, Australia and commercial operations in China, Singapore and Japan. In 2022, operations in the Asia Pacific segment contributed five percent of our consolidated liquids production and six percent of our consolidated natural gas production.
Australia
2022
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Australia Pacific LNG47.5 %ConocoPhillips/Origin Energy- - 817 136
Australia Pacific LNG Pty Ltd. (APLNG), our joint venture with Origin Energy Limited and China Petrochemical Corporation (Sinopec), 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 3,500 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 February 2022, we completed the acquisition of an additional 10 percent interest in APLNG from Origin Energy, increasing our ownership to 47.5 percent, with Origin and Sinopec retaining 27.5 percent and 25 percent interests, respectively.
For additional information, see Note 4 and Note 10.
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 interest to 80 percent, in June 2020. A 3D seismic survey acquisition was completed in October 2021, and this data is being evaluated for future exploration drilling opportunities.
In October 2022, we entered into a Joint Operating Agreement with 3D Oil for an 80 percent interest in Exploration Permit (VIC/P79) in the Otway Basin, Australia. The transaction is pending final regulatory approvals which are expected in the first half of 2023. Existing seismic data is currently being reprocessed and will be evaluated for future exploration drilling opportunities.
11
ConocoPhillips 2022 10-K
Business and PropertiesTable of Contents
Indonesia
2022
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
South Sumatra54.0 %ConocoPhillips- - 48 8
In March 2022, we completed the sale of our subsidiary that indirectly held the company's 54 percent interest in the Indonesia Corridor Block PSC and a 35 percent shareholding interest in the Transasia Pipeline Company. See Note 3.
China
2022
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Penglai49.0 %CNOOC30 - - 30
Penglai
In 2022, Chinese National Offshore Oil Corporation (CNOOC) and ConocoPhillips approved adjustments to our Bohai PSC production licenses, aligning all three Penglai Field licenses to expire in 2039.
The Penglai 19-3, 19-9 and 25-6 fields are located in the Bohai Bay Block 11/05 and are being developed in stages.
Phase 3 consists of three new wellhead platforms and a central processing platform. First production from Phase 3 was achieved in 2018. This project could include up to 186 wells, 157 of which have been completed and brought online as of December 2022.
Phase 4A consists of one new wellhead platform and achieved first production in 2020. This project could include up to 62 new wells, 33 of which have been completed and brought online as of December 2022.
Phase 4B is currently under construction and consists of two new wellhead platforms. This project could include up to 160 new wells.
Malaysia
2022
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Gumusut29.5 %Shell14 - - 14
Malikai35.0 Shell13 - - 13
Kebabangan (KBB)30.0 KPOC1 - 65 12
Siakap North-Petai21.0 PTTEP3 - 1 3
Total Malaysia31 - 66 42
We have varying stages of exploration, development and production activities across approximately 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.
ConocoPhillips 2022 10-K
12
Business and PropertiesTable of Contents
Block J
Gumusut
We currently have a 29.5 percent working interest in the unitized Gumusut Field. Gumusut Phase 3 first oil was achieved in 2022. Development drilling associated with Gumusut Phase 4, a four-well program targeting the Brunei acreage of the unitized Gumusut Field that straddles Malaysia and Brunei waters, is planned to commence in early 2024 with first oil anticipated in late 2024.
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.
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 January 2020, due to the rupture of a third-party pipeline which carries gas production from KBB to one of its markets. The third-party operator continues to progress the pipeline repair.
Block G
Malikai
We hold a 35 percent working interest in Malikai. 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, we drilled exploration and appraisal wells, resulting in oil discoveries under evaluation at Salam and Benum Fields. In 2022, we drilled two additional appraisal wells and one exploration well to evaluate the oil discoveries. The Gagau-1 exploration well made a sub-commercial gas discovery and was expensed as a dry hole. The information from the well results will help optimize future development plans.
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. The Mersing-1 exploration well was drilled in 2022, did not encounter any significant hydrocarbons and was expensed as a dry hole. SK304 is a block that we are continuing to evaluate.
In 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. A 3D seismic survey was acquired in 2022, and processing and evaluation of this data will be ongoing through 2023.
Other International
The Other International segment includes interests in Colombia as well as contingencies associated with prior operations in other countries.
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 due to the lack of a defined Environmental Licensing process.
Venezuela
For discussion of our contingencies in Venezuela, see Note 11.
13
ConocoPhillips 2022 10-K
Business and PropertiesTable of Contents
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 commodity 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. In 2022, we entered into several agreements with Sempra entities in connection with the Port Arthur LNG (PALNG) facility, including a 20-year sale and purchase agreement for 5 million tonnes per annum (MTPA) of LNG offtake at the start-up of Phase 1 of the PALNG facility. In addition, we will acquire 30 percent of the equity in Phase 1 of PALNG. Development of PALNG is subject to completing required commercial agreements and resolving a number of risks and uncertainties, obtaining financing and reaching a final investment decision, among other factors. In addition, we secured regasification capacity at the German LNG terminal in Brunsbuttel that will provide access to the German natural gas market.
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.
ConocoPhillips 2022 10-K
14
Business and PropertiesTable of Contents
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 lower emissions and implement sustainability measures.
LNG Liquefaction
We are the second-largest LNG liquefaction technology provider globally. Our Optimized Cascade® LNG liquefaction technology has been licensed for use in 28 LNG trains around the world, with feasibility studies ongoing for additional trains.
Low-Carbon Technologies
In 2021, we established a multi-disciplinary Low-Carbon Technologies organization, with the remit to support our net-zero ambition, understand the alternative energy landscape and prioritize opportunities for future competitive investment.
Throughout 2022, we continued our focus on implementing emissions reduction projects across our global portfolio, including production efficiency measures and methane and flaring reductions. In September 2021, we strengthened our 2030 GHG emissions intensity reduction target to 40-50 percent from a 2016 baseline and expanded the target to apply on both a gross operated and net equity basis. To help achieve this goal, the Low-Carbon Technologies organization worked with the company's business units to begin developing and implementing region-specific net-zero scenarios identifying potential technology solutions for hard-to-abate emissions, and piloting new methods to reduce and accelerate Scope 1 and Scope 2 emissions reduction. Potential projects evaluated included CCS and electrification studies, zero/low emission equipment design enhancements, installations to continuously monitor and detect methane emissions, and operational changes to reduce flaring and methane venting volumes.
Within the low-carbon opportunities landscape, the company has prioritized opportunities in CCS and hydrogen. In 2022, we evaluated carbon dioxide storage sites along the U.S. Gulf Coast, progressed land acquisition efforts and business development work, initiated permitting activities for a potential appraisal well for carbon sequestration and advanced engineering studies for multiple opportunities. In Europe, we continued evaluation of a carbon capture solution to reduce emissions at the operated Teesside Oil Terminal with engineering studies and a due diligence phase with the United Kingdom's Department for Business, Energy and Industrial Strategy.
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 578 billion cubic feet of natural gas, 345 million barrels of crude oil and 12.9 million megawatt hours of electricity 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 and power supply 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; equipment and personnel; economic analysis in connection with portfolio management; and safely operating oil and gas producing properties.
15
ConocoPhillips 2022 10-K
Business and PropertiesTable of Contents
Human Capital Management
Values, Principles and Governance
At ConocoPhillips, our human capital management (HCM) approach starts with a foundation in our core SPIRIT Values - Safety, People, Integrity, Responsibility, Innovation, and Teamwork. These SPIRIT Values set the tone for how we interact with all of our internal and external stakeholders. We believe a safe organization is a successful organization, and therefore, 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 where 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. We value diversity and create an inclusive culture of belonging. Together, we deliver strong performance, but not at all costs. We embrace our core cultural attributes that are shared by everyone, everywhere.
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. As we integrate various assets through acquisitions, it is important that we drive this culture of continuous learning and improvement, refine our existing HSE processes and tools and enhance our commitment to safe, efficient and responsible operations.
COVID-19 Response
In 2022, the number of COVID-19 cases across the company was significantly less than the prior two years. With less risk to our operations, the Crisis Management Support Team that had been in place since the beginning of the pandemic, was disbanded in August; however, our Health Services organization continues to monitor the situation and support business units and functions as needed to minimize any potential for business interruption.
Diversity, Equity and Inclusion
At ConocoPhillips, we believe our unique differences power the future of energy. Our DEI vision is to foster an inclusive culture that values the rich mixture of backgrounds, identities and workstyles of our people, built on equitable practices that support all employees in unlocking their full potential. Our commitment to DEI is foundational to our SPIRIT Values and to achieving our business objectives. All employees play a part in creating and sustaining an inclusive work environment because everyone benefits from DEI.
ConocoPhillips 2022 10-K
16
Business and PropertiesTable of Contents
The ELT has ultimate accountability for advancing our DEI commitments through a governance structure that includes a Chief Diversity Officer (CDO), a dedicated DEI organization and a global DEI Council consisting of senior leaders from across the company. The company sets goals and measures progress based on a transparent DEI strategy with four pillars that guide our focus and approach: people, programs and processes, culture and our external brand and reputation. All company leaders are accountable for setting personal DEI goals and advancing DEI through local efforts. Our DEI efforts and progress are regularly reviewed with the Board of Directors.
In 2022, we welcomed our new CDO. Over the course of the year, the CDO established the DEI organization and embarked on a global listening tour to understand the impact of current efforts, areas for improvement and the overall employee experience. Based on the insights and perspectives from employees, the company's DEI strategy was refreshed. Highlights from our 2022 DEI accomplishments include:
•Reviewing the results of the 2022 Perspectives survey and continuing to integrate the insights into our DEI efforts;
•Staffing the newly established DEI organization;
•Launching our DEI Dashboards 2.0 internally, which feature expanded global and U.S. workforce metrics and industry benchmark data; and
•Hosting our inaugural Black Leadership Symposium to support future leadership diversity in the company.
We continue to actively monitor diversity metrics on a global basis. We are committed to being transparent as we build a more diverse, equitable and inclusive workplace. Tables of 2022 employee demographics by gender and ethnicity, and by country, are shown below:
2022 Employees by Gender and Race/Ethnicity
GlobalU.S.
MaleFemaleWhitePOC*
All Employees73 %27 %70 %30 %
All Leadership74 26 77 23
Top Leadership75 25 82 18
Junior Leadership74 26 75 25
*"POC" refers to People of Color or racial and ethnic minorities self-reported in the U.S.
2022 Employees by Country
Percent of Total
U.S.66 %
Norway17
Canada9
Australia3
U.K.3
China1
Other Global Locations1
100 %
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.
17
ConocoPhillips 2022 10-K
Business and PropertiesTable of Contents
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 extensively for external experienced hires to supplement our university and internal pipeline. These individuals bring critical skills and help us to maintain a broad range of expertise and experience. 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. We conduct routine talent assessments with leaders to ensure we have the organizational capacity and capabilities to execute our business plans.
We closely monitor recruitment metrics through our internal university and experienced hire dashboards and track voluntary turnover metrics to guide our retention activities.
2022 Hiring & Attrition Metrics
Percent of Total
U.S. University hire acceptance70 %
U.S. Interns acceptance68
Diversity hiring - Women29
Diversity hiring - U.S. POC41
Total voluntary attrition6
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. We develop our workforce through a combination of on-the-job learning, formal training, regular feedback, coaching and mentoring. Skills-based Talent Management Teams (TMTs) guide targeted employee development and career progression by skills, discipline and location. The TMTs help identify our workforce planning 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 monetary and non-monetary 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, annual career development conversations with supervisors, 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 of Directors. This work ensures we have the talent available for future leadership roles and serves 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 promoting our "Who We Are" culture. Our leadership reviews the survey feedback to guide priorities and goals. Our employee feedback strategy is delivered through this annual engagement survey and as needed; shorter ad hoc pulse surveys are leveraged to unlock targeted insights in support of our human capital priorities.
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, 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 the financial futures of our employees and are competitive within local markets.
ConocoPhillips 2022 10-K
18
Business and PropertiesTable of Contents
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. We also offer employees flexibility through the Hybrid Office Work (HOW) program in all of our global locations, which provides eligible employees a combination of work from both office and home. We also provide coverage for families requiring disability support, elder care and childcare, including onsite childcare, 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.
Compensation Risk Mitigation
We have considered the risks associated with each of our 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
We care about our neighbors in the communities in which we operate. We actively support and participate in leadership conferences, trade associations and minority nonprofit organizations.
Our employees make our communities stronger. We are proud to support their generous involvement in local charitable activities through employee volunteerism and 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.
General
At the end of 2022, we held a total of 1,249 active patents in 49 countries worldwide, including 472 active U.S. patents. During 2022, we received 46 patents in the U.S. and 124 foreign patents. Our products and processes generated licensing revenues of $86 million related to activity in 2022. 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 54 through 56 under the captions "Environmental" and "Climate Change" is incorporated herein by reference. It includes information on expensed and capitalized environmental costs for 2022 and those expected for 2023 and 2024.
Website Access to SEC Reports
Our internet website address is www.conocophillips.com. 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 www.sec.gov.
19
ConocoPhillips 2022 10-K