v3.26.3
Derivative and Financial Instruments
 9 Months Ended
Sep. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative and Financial Instruments
Note 9—Derivative and Financial Instruments
We use futures, forwards, swaps and options in various markets to meet our customer needs, capture market opportunities and manage foreign exchange currency risk.
Commodity Derivative Instruments
Our commodity business primarily consists of natural gas, crude oil, bitumen, NGLs, LNG and power.
Commodity derivative instruments are held at fair value on our consolidated balance sheet. Where these balances have the right of setoff, they are presented on a net basis. Related cash flows are recorded as operating activities on our consolidated statement of cash flows. On our consolidated income statement, gains and losses are recognized either on a gross basis if directly related to our physical business or on a net basis if held for trading. Gains and losses related to contracts that meet and are designated with the NPNS exception are recognized upon settlement. We generally apply this exception to eligible crude contracts and certain gas contracts. We do not apply hedge accounting for our commodity derivatives.
The following table presents the gross fair values of our commodity derivatives, excluding collateral, on our consolidated balance sheet:
Millions of Dollars
September 30
2026		December 31
2025
Assets
Prepaid expenses and other current assets
$1,295 491 
Other assets
208 113 
Liabilities
Other accruals
1,177 438 
Other liabilities and deferred credits
194 100 
The gains (losses) from commodity derivatives included in our consolidated income statement are presented in the following table:
Millions of Dollars
Three Months Ended
September 30
Nine Months Ended
September 30
2026202520262025
Sales and other operating revenues
$(85)62 173 146 
Other income
(3)(3)(12)(6)
Purchased commodities
173 (6)16 (52)
The table below summarizes our net exposures resulting from outstanding commodity derivative contracts:
Open Position
Long (Short)
September 30
2026		December 31
2025
Commodity
Natural gas and power (BCF equivalent)
Fixed price(54)(15)
Basis(3)(17)
Interest Rate Derivative Instruments
Our equity method investee, PALNG, has certain interest rate swaps that are measured at fair value. The gains (losses) from these swaps included in our consolidated income statement are presented in the following table:
Millions of Dollars
Three Months Ended
September 30
Nine Months Ended
September 30
2026202520262025
Equity in earnings of affiliates
$16 (6)44 27 
Financial Instruments
We invest in financial instruments with maturities based on our cash forecasts for the various accounts and currency pools we manage. The types of financial instruments in which we currently invest include:
•Time deposits: Interest bearing deposits placed with financial institutions for a predetermined amount of time.
•Demand deposits: Interest bearing deposits placed with financial institutions. Deposited funds can be withdrawn without notice.
•Commercial paper: Unsecured promissory notes issued by a corporation, commercial bank or government agency purchased at a discount to mature at par.
•U.S. government or government agency obligations: Securities issued by the U.S. government or U.S. government agencies.
•Foreign government obligations: Securities issued by foreign governments.
•Corporate bonds: Unsecured debt securities issued by corporations.
•Asset-backed securities: Collateralized debt securities.
The following investments are carried on our consolidated balance sheet at cost plus accrued interest, and the table reflects remaining maturities at September 30, 2026, and December 31, 2025:
Millions of Dollars
Carrying Amount
Cash and cash equivalents
Short-term investments
September 30
2026		December 31
2025		September 30
2026		December 31
2025
Cash$513 543 
Demand deposits
4,269 3,781 
Time deposits
1 to 90 days
2,777 975 1,707 6 
91 to 180 days
4 17 
Within one year
— 8 
U.S. government obligations
1 to 90 days
185 1,198 — — 
$7,744 6,497 1,711 31 
The following investments in debt securities classified as available for sale are carried at fair value on our consolidated balance sheet at September 30, 2026, and December 31, 2025:
Millions of Dollars
Carrying Amount
Cash and cash equivalentsShort-term investmentsInvestments and long-term
receivables
September 30
2026		December 31
2025		September 30
2026		December 31
2025		September 30
2026		December 31
2025
Major Security Type
Corporate bonds
$— — $307 308 689 651 
Commercial paper
21 — 86 72 
U.S. government obligations— — 46 46 221 224 
U.S. government agency obligations
1 — — 1 
Foreign government obligations
8 9 12 9 
Asset-backed securities
5 18 201 263 
$21 — $453 453 1,123 1,148 
Cash and cash equivalents and short-term investments have remaining maturities within one year. Investments and long-term receivables have remaining maturities that vary from greater than one year through 12 years.
The following table summarizes the amortized cost basis and fair value of investments in debt securities classified as available for sale:
Millions of Dollars
Amortized Cost Basis
Fair Value
September 30
2026		December 31
2025		September 30
2026		December 31
2025
Major Security Type
Corporate bonds
$1,007 953 996 959 
Commercial paper
107 72 107 72 
U.S. government obligations
271 268 267 270 
U.S. government agency obligations
1 1 1 1 
Foreign government obligations
20 18 20 18 
Asset-backed securities
207 280 206 281 
$1,613 1,592 1,597 1,601 
No allowance for credit losses has been recorded on investments in debt securities which are in an unrealized loss position.

For the three- and nine-month periods ended September 30, 2026, proceeds from sales and redemptions of investments in debt securities classified as available for sale were $215 million and $693 million, respectively. For the three- and nine-month periods ended September 30, 2025, proceeds from sales and redemptions of investments in debt securities classified as available for sale were $271 million and $782 million, respectively. Gross realized gains and losses included in earnings from those sales and redemptions were negligible. The cost of securities sold and redeemed is determined using the specific identification method.
Credit Risk
Financial instruments subject to concentrations of credit risk primarily include cash equivalents, short‑ and long‑term investments in high‑quality debt securities, OTC derivative contracts and trade receivables. Cash and investments are diversified across high‑quality commercial paper, government money market funds, U.S. government and agency obligations, high-quality corporate bonds and asset‑backed securities, foreign government obligations and deposits with major financial institutions. Credit risk from OTC derivatives is managed through counterparty credit limits, margining and collateral requirements, while exchange‑cleared derivatives carry minimal risk but expose us to broker receivables related to margin postings. Trade receivables are broadly diversified geographically, generally have short payment terms and are actively monitored with collateral and netting arrangements used where appropriate.

Certain of our derivative contracts require us to post collateral if exposure exceeds fixed or credit‑rating‑dependent thresholds, which generally decrease with lower ratings and fall to zero below investment grade, with cash as the primary form of collateral and letters of credit permitted in some cases. The aggregate fair value of all derivative instruments with such credit risk-related contingent features that were in a liability position at September 30, 2026, and December 31, 2025 was $125 million and $73 million, respectively. For these instruments, no collateral was posted at September 30, 2026, or December 31, 2025. If our credit rating had been downgraded below investment grade at September 30, 2026, we would have been required to post $22 million of additional collateral, either in cash or through letters of credit.