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 in Canada; and an inventory of global exploration prospects. On December 31, 2023, we employed approximately 9,900 people worldwide and had total assets of about $96 billion. Total company production for the year was 1,826 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.
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We explore for, produce, transport and market crude oil, bitumen, natural gas, NGLs and LNG on a worldwide basis. At December 31, 2023, 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 85 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 312023
2022
2021
Crude oil
Consolidated operations3,032 2,975 2,964
Equity affiliates89 93 63
Total Crude Oil3,121 3,068 3,027
Natural gas liquids
Consolidated operations892 845 644
Equity affiliates48 50 33
Total Natural Gas Liquids940 895 677
Natural gas
Consolidated operations1,408 1,461 1,523
Equity affiliates879 959 617
Total Natural Gas2,287 2,420 2,140
Bitumen
Consolidated operations410 216 257
Total Bitumen410 216 257
Total consolidated operations5,742 5,497 5,388
Total equity affiliates1,016 1,102 713
Total company6,758 6,599 6,101
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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. Additionally, we are one of Alaska's largest owners of state, federal and fee exploration leases, with approximately one million net undeveloped acres at year-end 2023. Alaska operations contributed 15 percent of our consolidated liquids production and two percent of our consolidated natural gas production.
2023
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Greater Prudhoe Area36.1 %Hilcorp66 16 35 87
Greater Kuparuk Area89.2-94.7ConocoPhillips64 - 2 65
Western North Slope100.0ConocoPhillips43 - 1 43
Total Alaska173 16 38 195
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. Field installations include seven production facilities, two gas plants, two seawater plants and a central power station. In 2023, on average, there were two rigs drilling throughout the year.
Greater Kuparuk Area
The Greater Kuparuk Area includes the Kuparuk River Unit, which consists of the Kuparuk Field and six satellite fields. Field installations include three central production facilities which separate oil, natural gas and water, and a seawater treatment plant. In 2023, we operated one drilling rig and two workover rigs. The Nuna project, which targets the Moraine reservoir, was sanctioned in 2023 with first oil anticipated by early 2025. The Coyote reservoir discovered in 2021 progressed to development in 2023 with additional wells planned in 2024 and 2025.
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Western North Slope
The Western North Slope includes the Colville River Unit, the Greater Mooses Tooth Unit and the Bear Tooth Unit. In 2023, on average, there were two rigs drilling throughout the year.
The Colville River Unit includes the Alpine Field and four satellite fields. Field installations include one central production facility, which separates oil, natural gas and water. In 2023, we focused our development activities on the Narwhal trend, a reservoir within the Alpine Field, and anticipate completing the current phase in 2024. The results will help inform the design and optimization of future development.
The Greater Mooses Tooth Unit is the first unit established entirely within the National Petroleum Reserve Alaska (NPR-A). The unit was constructed in two phases: Greater Mooses Tooth #1 (GMT1) and Greater Mooses Tooth #2 (GMT2). Development activity continued in 2023.
On March 12, 2023, the Department of the Interior issued a Record of Decision (ROD) approving the Willow project, and in December 2023, we announced FID. The project will consist of three drill sites, an operations center and camp, and a processing facility. First production is anticipated in 2029.
Exploration
In 2023, the Bear-1 exploration well was drilled at a location 30 miles south of the Greater Kuparuk Area and east of the Colville River on state lands. No commercial hydrocarbons were found, and the well was deemed a dry hole and permanently plugged and abandoned.
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.
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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 2023 production volumes, the Lower 48 is our largest segment and contributed 64 percent of our consolidated liquids production and 76 percent of our consolidated natural gas production.
2023
Crude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Delaware Basin274 135 768 537
Eagle Ford114 61 306 226
Midland Basin105 42 205 182
Bakken66 16 150 106
Other10 2 28 16
Total Lower 48569 256 1,457 1,067
Delaware Basin
We hold approximately 654,000 unconventional net acres in the Delaware Basin spanning west Texas through southeast New Mexico. Current development activity targets prospects in the Avalon, Bone Springs and Wolfcamp formations while balancing leasehold obligations and permit terms. We operated ten rigs and three frac crews on average during 2023, resulting in 160 operated wells drilled and 148 operated wells brought online.
Eagle Ford
We hold approximately 199,000 unconventional net acres in the Eagle Ford located in south Texas. The current focus is on full-field development, using customized well spacing and stacking patterns adapted through reservoir analysis. We operated six rigs and two frac crews on average during 2023, resulting in 143 operated wells drilled and 123 operated wells brought online.
Midland Basin
We hold approximately 248,000 unconventional net acres in the Midland Basin located in west Texas. The current development strategy is focused on full-field development utilizing multi-well pad projects targeting both Spraberry and Wolfcamp reservoir targets. We operated five rigs and two frac crews on average during 2023, resulting in 98 operated wells drilled and 106 operated wells brought online.
Bakken
We hold approximately 562,000 unconventional net acres in the Williston Basin located in North Dakota and eastern Montana. The primary producing zones are the Middle Bakken and Three Forks formations. We operated three rigs and one frac crew on average during 2023, resulting in 61 operated wells drilled and 37 operated wells brought online.
Partner-Operated
We participate in partner-operated wells when they align with our investment decision criteria and development strategies. In 2023, we participated in partner-operated wells with varying working interests across our Lower 48 portfolio.
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.
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Canada
Our Canadian operations consist of the Surmont oil sands development in Alberta, the liquids-rich Montney unconventional play in British Columbia and commercial operations. In 2023, operations in Canada contributed seven percent of our consolidated liquids production and three percent of our consolidated natural gas production.
2023
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDBitumenMBDTotalMBOED
Average Daily Net Production
Surmont*100.0 %ConocoPhillips- - - 81 81
Montney100.0ConocoPhillips9 3 65 - 23
Total Canada9 3 65 81 104
*Acquired remaining 50 percent working interest in Surmont in October 2023. See Note 3.
Our bitumen resources in Canada are produced via SAGD, an enhanced thermal oil recovery method where 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, and a diluent recovery unit. These facilities have allowed the asset to lower blend ratio and diluent supply costs, while gaining protection from diluent supply disruptions and increased market access for our product. At December 31, 2023, we held approximately 684,000 net acres of land in the Athabasca Region of northeastern Alberta.
Surmont
The Surmont oil sands leases are located south of Fort McMurray, Alberta. Surmont is a 100 percent working interest asset that offers sustained, long-life production. We are focused on keeping facilities full, structurally lowering costs, reducing GHG intensity and optimizing asset performance.
In October 2023, we completed our acquisition of the remaining 50 percent working interest in Surmont from TotalEnergies EP Canada Ltd. We achieved first production on Pad 267 in December. We expect first production in 2025 on our next pad, Pad 104.
Montney
The Montney is an unconventional play located in northeastern British Columbia. At December 31, 2023, we held approximately 297,000 net acres of land in the Montney.
In 2023, we continued development of the asset with the next series of pads, which included drilling 16 horizontal wells and bringing 15 wells online. The second phase of our central processing facility was successfully started in the third quarter.
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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 2023, operations in Europe, Middle East and North Africa contributed nine percent of our consolidated liquids production and 16 percent of our consolidated natural gas production.
Norway
2023
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Greater Ekofisk Area28.3-35.1%ConocoPhillips42 2 42 51
Heidrun24.0 Equinor10 - 39 17
Aasta Hansteen10.0 Equinor- - 66 11
Troll1.6 Equinor1 - 59 11
Visund9.1 Equinor1 2 48 11
Alvheim20.0 Aker BP5 - 10 7
OtherVariousEquinor5 - 15 7
Total Norway64 4 279 115
Greater Ekofisk Area
The Greater Ekofisk Area is located offshore Stavanger, Norway, in the North Sea, and is comprised of five producing fields. Crude oil is exported to our operated terminal located at Teesside, U.K., and the natural gas is exported to Emden, Germany. The Tommeliten A development, a new subsea tieback to Ekofisk, achieved first production in 2023, and the Eldfisk North subsea development will be tied back to Eldfisk, with first production expected in 2024.
Heidrun Field
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 Field
The Aasta Hansteen Field is 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.
Troll Field
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.
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Visund Field
The Visund Field is located in the northern part of 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 the gas processing plants at Kollsnes and Kårstø, through the Gassled transportation system.
Alvheim Field
The Alvheim Field is located in the northern part of the North Sea 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, U.K., through the SAGE Pipeline. The Kobra East and Gekko (KEG) project, a new subsea tieback to the Alvheim FPSO, achieved first production in 2023.
Other Fields
We also have varying ownership interests in three other producing fields in the Norwegian sector of the North Sea. In 2023, the partner-operated Breidablikk project achieved first production.
Exploration
In 2023, we participated in the partner-operated Ve exploration well on PL919 located in the North Sea. We were also awarded two new exploration licenses, PL1146B and PL036G located in the North Sea and traded into two licenses, PL886 and PL886B located in the Norwegian Sea. In the third quarter of 2023, we recorded the investment in the suspended Warka discovery well on license PL1009, located in the Norwegian Sea and drilled in 2020, as dry hole expense. In 2024, we plan to drill the second appraisal well in the 2020 Slagugle discovery located in the Norwegian Sea and participate in a partner-operated exploration well in the Alvheim Deep prospect.
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, U.K.
Facilities
We operate and have a 40.25 percent ownership interest in a crude oil stabilization and NGLs processing facility at Teesside, U.K. to support our Norway operations.
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Qatar
2023
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
QatarEnergy LNG N(3)30.0 %QatarEnergy LNG13 8 375 83
QatarEnergy LNG N(3) (N3), formerly Qatar Liquefied Gas Company Limited (3) (QG3), is an integrated development jointly owned by QatarEnergy (68.5 percent), ConocoPhillips (30 percent) and Mitsui & Co., Ltd. (1.5 percent). N3 consists of upstream natural gas production facilities, which produce approximately 1.4 gross BCF 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.
N3 executed the development of the onshore and offshore assets as a single integrated development with QatarEnergy LNG N(4) (N4), formerly 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 N3 and N4 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 to participate in the North Field East (NFE) and North Field South (NFS) LNG projects. Formation of the NFE joint venture, QatarEnergy LNG NFE (4) (NFE4), formerly Qatar Liquefied Gas Company Limited (8) (QG8), closed in December 2022 and the formation of the NFS joint venture, QatarEnergy LNG NFS (3) (NFS3), formerly Qatar Liquefied Gas Company Limited (12) (QG12), closed in June 2023. See Note 3 and Note 4.
Libya
2023
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Waha Concession20.4 %Waha Oil Co.48 - 29 53
The Waha Concession is made up of multiple concessions and encompasses approximately 13 million acres onshore in the Sirte Basin for exploration and production activity. Oil is transported by pipeline to the Es Sider terminal for export. Natural gas is transported and sold domestically. Current production comes from 13 existing fields within the Waha Concession.
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Asia Pacific
The Asia Pacific segment has exploration and production operations in China, Malaysia, Australia and commercial operations in China, Singapore and Japan. In 2023, operations in the Asia Pacific segment contributed five percent of our consolidated liquids production and three percent of our consolidated natural gas production.
Australia
2023
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Australia Pacific LNG47.5 %ConocoPhillips/Origin Energy- - 844 141
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 MTPA 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 MTPA of LNG, and Japan-based Kansai Electric Power Co., Inc. under a 20-year sales agreement for approximately 1 MTPA of LNG.
For additional information, see Note 3, Note 4 and Note 10.
Exploration
We own an 80 percent working interest in both Exploration Permit (T/49P) and (VIC/P79) located in the Otway Basin, Australia. Existing seismic data for both permits is being evaluated for future exploration drilling opportunities.
During 2023, we executed a drilling consortium agreement with other operators in Australia and secured a contract for a semi-sub drilling rig. The proposed exploration program involves seabed surveys and two exploration wells planned for 2025.
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China
2023
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Penglai49.0 %CNOOC32 - - 32
Penglai
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 from large offshore platforms and a FPSO. Most crude oil produced from the block is sold to the China domestic market, with the remainder exported to international markets.
Phase 3 consists of three wellhead platforms and a central processing platform. First production from Phase 3 was achieved in 2018. This project could include up to 186 wells, 175 of which have been completed and brought online as of December 2023.
Phase 4A consists of one wellhead platform and achieved first production in 2020. This project could include up to 62 new wells, 54 of which have been completed and brought online as of December 2023.
Phase 4B consists of two wellhead platforms, WHP-H and WHP-N, both of which achieved first production in the fourth quarter of 2023. This project could include up to 144 new wells, 3 of which have been completed and brought online as of December 2023.
Malaysia
2023
InterestOperatorCrude OilMBDNGLMBDNatural GasMMCFDTotalMBOED
Average Daily Net Production
Gumusut29.5 %Shell13 - - 13
Malikai35.0 Shell12 - - 12
Kebabangan (KBB)30.0 KPOC1 - 47 9
Siakap North-Petai21.0 PTTEP2 - 1 2
Total Malaysia28 - 48 36
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.
Block J
Gumusut
We own 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 early 2025. The unitized Gumusut Field is operated on a FPS with oil evacuation via a pipeline to the Sabah Oil and Gas Terminal (SOGT) for tanker liftings.
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KBBC
We own a 30 percent working interest in the KBB, Kamunsu East and Kamunsu East Upthrown Canyon gas and condensate fields.
KBB
Gas is transported from the KBB platform via pipeline for sale to the domestic gas market. During 2019, KBB tied-in to a nearby third-party floating LNG vessel, which provided increased gas offtake capacity.
Block G
Malikai
We own a 35 percent working interest in Malikai. Malikai Phase 2 development first oil was achieved in February 2021. Malikai operates on a tension leg platform and pipes oil to the KBB platform for processing. Oil evacuation is via pipeline to SOGT for tanker liftings.
Siakap North-Petai
We own 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. The subsea system in the SNP oil field is tied back to a FPSO operated by PTTEP.
Exploration
We own a 50 percent working interest and operate both Blocks WL4-00 and SK304. Block WL4-00 encompasses 0.3 million net acres primarily in the Salam and Benum Fields. Block SK304 encompasses 1.1 million net acres off the coast of Sarawak, offshore Malaysia. We continue to evaluate these blocks and are using information from prior well results to help optimize future development plans.
In 2021, we were awarded operatorship and an 85 percent working interest in Block SB405 encompassing 1.2 million net acres off the coast of Sabah, offshore Malaysia. A 3D seismic survey was acquired in 2022, and processing and evaluation of this data is currently ongoing.
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 operating 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 contracts for this project are currently in force majeure due to the lack of a defined environmental licensing required for the execution of unconventional exploratory activities. Additionally, the government of Colombia supports a ban on such activities.
Venezuela
For discussion of our contingencies in Venezuela, see Note 11.
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Other
Marketing Activities
Our Commercial organization manages our worldwide commodity portfolio, which includes natural gas, crude oil, bitumen, NGLs, LNG and power. 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.
Crude Oil, Bitumen and NGLs
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.
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.
LNG
We have producing equity LNG facilities located in Australia and Qatar, by which volumes are primarily sold under long-term contracts with prices based on market indices. In 2023, we continued to progress our global LNG strategy, acquiring a 30 percent equity interest in the Port Arthur LNG (PALNG) facility and contracting 5 MTPA offtake capacity. We secured additional offtake capacity in North America of 2.4 MTPA, which includes a 20-year offtake agreement for approximately 2.2 MTPA at the Saguaro LNG project on the West Coast of Mexico, subject to Mexico Pacific reaching FID and other certain conditions precedent as well as a 5-year offtake agreement for 0.2 MTPA at the Energia Costa Azul Phase 1. In addition, we executed additional regasification capacity and services agreements for approximately 1.7 MTPA, including a 15-year throughput agreement for 1.5 MTPA of capacity and a 5-year services agreement for 0.2 MTPA at the Gate LNG terminal in the Netherlands. Our marketing efforts are focused on further progressing the placement of our offtake volumes into Europe and Asia.
Energy Response Partnerships
We maintain memberships in several response and containment partnerships across the globe as a key element of our emergency response preparedness program in addition to internal response resources.
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, many of which 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.
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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 FEED 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. We continue our focus on implementing emissions reduction projects across our global portfolio, including operational efficiency measures and methane and flaring reductions. In April 2023, we accelerated our 2030 GHG emissions intensity reduction target to a 50-60 percent reduction by 2030 from a 2016 baseline on both a gross operated and net equity basis. In addition, we set a new near-zero methane intensity target of less than 1.5-kilogram carbon dioxide equivalent per BOE by 2030. We are also on track to meet the World Bank Zero Routine Flaring goal by 2025. To help achieve these targets, the Low-Carbon Technologies organization continued to work with the company's business units to develop and implement region-specific emission reduction initiatives and identify potential technology solutions for hard-to-abate emissions.
Over the last two years, we continued our work to identify additional pathways to abate our Scope 1 and 2 emissions as well as low-carbon opportunities for future competitive investment. For example:
•We conducted CCS and electrification studies, initiated zero/low emission equipment design enhancements, installed mechanisms to continuously monitor and detect methane emissions and implemented operational changes to reduce flaring and methane venting volumes.
•We evaluated carbon dioxide storage sites primarily along the U.S. Gulf Coast, progressed land acquisition efforts and business development work, initiated permitting activities for potential appraisal wells for carbon sequestration and advanced engineering studies for multiple opportunities.
•We advanced hydrogen opportunities in the U.S., Middle East and Asia Pacific regions. In September 2023, JERA and Uniper announced a non-binding Heads of Agreement together with ConocoPhillips, for the potential sale of ammonia to Uniper. This agreement further advanced our cooperation to potentially develop a low-carbon, ammonia production facility on the U.S. Gulf Coast that would supply low-carbon fuels from the U.S. for use in the U.S., Europe, Japan and greater Asia.
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 440 billion cubic feet of natural gas, 275 million barrels of crude oil and 15.9 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.
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Human Capital Management
Values, Principles and Governance
At ConocoPhillips, our strategy, performance, culture and reputation are fueled by our workforce. We recognize that attracting, retaining, and developing talent is a competitive imperative within our changing industry. 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, attracting a world-class workforce and valuing our people. 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 are experts in what we do and continuously find ways to do our jobs better. Our different backgrounds, ideas and views drive our success. 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. We believe our HSE policies such as Life Saving Rules, Process Safety Fundamentals, safety procedures and our stop work policy 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 facility designs, procedures, training, maintenance programs and designs. It is important that we drive an HSE culture of continuous learning and improvement, refine our existing HSE processes and tools and enhance our commitment to safe, efficient and responsible operations.
Diversity, Equity and Inclusion
As our industry evolves, we will continue to face both new opportunities and challenges, requiring a workforce that is equipped to address this evolution. We also need to cultivate an environment where everyone is encouraged and able to contribute - no matter their role, level or location. This is how innovation thrives, leading to a better business outcome. That is why we have put an emphasis on, and are committed to, elevating DEI and creating a great place to work.
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.
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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 advancing DEI through local efforts. Our DEI efforts and progress are regularly reviewed with the Board of Directors.
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 2023 employee demographics by gender and ethnicity, and by country, are shown below:
2023 Employees by Gender and Race/Ethnicity
GlobalU.S.
MaleFemaleWhitePOC*
All Employees73 %27 %68 %32 %
All Leadership74 26 76 24
Top Leadership74 26 82 18
Junior Leadership74 26 74 26
*"POC" refers to People of Color or racial and ethnic minorities self-reported in the U.S.
2023 Employees by Country
Percent of Total
U.S.66 %
Norway16
Canada9
Australia3
U.K.3
Other Global Locations3
100 %
Attracting A World-Class Workforce
Our continued success requires a strong workforce with the right skills across the globe to achieve our strategic objectives. We recruit extensively for experienced hires with critical skills to help us sustain a broad range of expertise. We also offer university internships across multiple disciplines and partner with diversity organizations and universities to create a pipeline for early-career talent. We strive to ensure equitable practices in every aspect of our recruitment process and conduct talent assessments to ensure we have the organizational capacity and capabilities to successfully execute our business plans.
We closely monitor recruitment metrics through internal talent dashboards and track voluntary turnover metrics to guide our retention activities.
2023 Hiring & Attrition Metrics
Percent of Total
U.S. University hire acceptance73 %
U.S. Interns acceptance71
Diversity hiring - Women27
Diversity hiring - U.S. POC41
Total voluntary attrition4
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Valuing our People
Employee Engagement and Development
We focus on the engagement and development of our workforce and encourage our employees to build diverse and fulfilling careers at 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 critical 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 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.
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.
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General
The environmental information contained in Management's Discussion and Analysis of Financial Condition and Results of Operations on pages 56 through 58 under the captions "Environmental" and "Climate Change" is incorporated herein by reference. It includes information on expensed and capitalized environmental costs for 2023 and those expected for 2024 and 2025.
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.
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