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corresp

August 3, 2011

Via EDGAR

Mr. Karl Hiller

Branch Chief

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

    Re:

    ConocoPhillips

Form 10-K for Fiscal Year ended December 31, 2010

Filed February 23, 2011

File No. 001-32395

Dear Mr. Hiller:

Our responses to the comments raised in your letter dated July 20, 2011, are set forth below. The
Staff’s comments are shown in bold followed by our responses.

Form 10-K for Fiscal Year ended December 31, 2010

Note 14 — Guarantees, page 102

Indemnifications, page 102

    1.

    We note your disclosure regarding indemnification payments that may exceed the $386 million
accrued at December 31, 2010, stating that “it is not possible to make a reasonable estimate
of the maximum potential amount of future payments.” Under FASB ASC 450-20-50-3 through 5,
you are required to disclose an estimate of the range of reasonably possible loss in excess of
the amounts accrued or a statement indicating that such an estimate cannot be made if
applicable. Please revise accordingly. If you cannot estimate the range of reasonably
possible additional loss, address the following points:

    •

    Describe the specific efforts you have undertaken to develop estimates.

    •

    Explain how you internally report exposures to management and the Board.

    •

    Indicate how you were able to estimate a probable amount of loss for accrual, but
not estimate a range of reasonably possible additional loss.

U.S. Securities and Exchange Commission

August 3, 2011

Page 2

    Response: With the indemnification disclosures in Note 14, we are specifically
responding to the disclosure requirements of ASC 460-10-50-4. As such, we disclosed, as
required by 50-4b(2), that the maximum amount of future payments is generally unlimited.
Further, we disclosed why an estimate of maximum exposure cannot be made, as required by
50-4b(3), by describing the nature of our indemnities as generally unlimited in amount and
duration, and that the majority are related to environmental issues. We discussed the
difficulties with measuring environmental liabilities in other parts of the financial
statement and MD&A disclosures.

    The required ASC 460 disclosure of maximum potential loss is broader than ASC 450 disclosure
requirements. Specifically, disclosure under ASC 460 is required even if the likelihood of
payment is remote, and maximum potential loss should include consideration of unasserted
claims. In contrast, the reasonably possible range-of-loss disclosure requirements of ASC
450 are narrower in scope than the disclosure of maximum potential loss. Accordingly, our
ASC 450 disclosures are included in a separate footnote (Note 15). Please see the response
to Comment 3 below, which addresses our disclosure decisions surrounding reasonably possible
losses.

Note 15 — Contingencies and Commitments, page 103

Environmental, page 103

    2.

    We note your disclosure explaining that with regard to various past acquisitions, you “have
not recorded accruals for any potential contingent liabilities that [you] expect to be funded
by the prior owners under [the agreed upon] indemnifications.” It is unclear from this
statement whether you practice a “netting” approach. FASB ASC 410-30-45-2 states that “[a]
debtor that has a right of setoff that meets all of the conditions in paragraph 210-20-45-1
may offset the related asset and liability and report the net amount.” However, “[i]t would
be rare, if ever, that the facts and circumstances surrounding environmental remediation
liabilities and related receivables and potential recoveries would meet all of these
conditions.” Please tell us the extent to which you are netting environmental obligations;
and describe the manner by which you are able to show that you meet each of the four
requirements for setoff, as enumerated in FASB ASC 210-20-45-1.

    Response: The use of the word “potential” in the excerpt the Staff noted above was
intended to communicate to the reader that, for certain environmental remediation exposures
arising in connection with past acquisitions, the Company is only secondarily liable for the
exposure, to the extent there is a third-party indemnification agreement. Based on the
indemnification agreements with us, the previous owners of these assets retained their
status as the primary obligor for the environmental remediation work and, as such, the
previous owner is considered a “potentially responsible party” (PRP) for the remediation
work. These previous owners are not disputing such PRP status, and the allocation of the
remediation costs between the various PRPs, including ourselves, is reasonably estimable.
Under these conditions, ASC 410-30-30-1 through 30-7 indicate we should only record an
environmental remediation obligation for our share of the remediation effort we believe we
will be funding. When considering ASC 410-30-35-8 and 9, these environmental
indemnification situations are more appropriately determined to be an allocation of costs
subject to joint and several liability among a group of primary obligors, not a
potential recovery from third party insurers or state reimbursement funds for amounts we
expect to expend in the future under some type of primary obligor status.

U.S. Securities and Exchange Commission

August 3, 2011

Page 3

    In situations where we are the primary obligor, and we have probable recoveries from third
parties, such as insurers, typically no legal right of setoff exists, and we present such
liabilities and receivables separately (i.e., gross) on the balance sheet.

Legal Proceedings, page 104

    3.

    We note your discussion of policies and procedures pertaining to legal proceedings under this
heading and within your critical accounting disclosure concerning asset retirement obligations
and environmental costs in MD&A. However, in neither place do you identify or discuss any
particular legal proceedings. Though you recite reportable legal proceedings in Item 3, in
accordance with Item 103 of Regulation S-K, the disclosures made to comply with FASB ASC 450
should be more analytical and may require a quantified assessment. Attempts to satisfy both
objectives through an integrated set of disclosure often result in lengthy factual recitations
that do not focus on the underlying loss contingency, the related exposure, and the likelihood
of a loss. Please expand your disclosure to include for each particular contingent matter, in
accordance with FASB ASC 450-20, the probability of each future
contingency occurring as:
probable, reasonably possible, or remote. Finally, where appropriate, please provide a
quantified assessment of reasonably possible loss in excess of the amounts accrued.

    Response: The matters recited in ConocoPhillips’ disclosures in Item 3 of the Form
10-K are disclosed therein because of the low materiality threshold of $100,000 contained in
Instruction 5C of Item 103 of Regulation S-K. We do not consider any single matter
disclosed in Item 3 to be material to ConocoPhillips. In contrast, ASC 450-20 does not
impose a specific dollar amount for the threshold of materiality, instead stating, “accrual
and disclosure of loss contingencies should be based on an evaluation of the facts and
circumstances in each particular situation” (450-20-55-1). In the Note 15 disclosure, we
provide a broad overview of the nature of our contingencies, how we account for them, and
our assessment of their overall materiality. We do not discuss any individual loss
contingency because, in our judgment, no single matter was material to the Company.

    We agree that, when an individual matter (or an aggregated group of related matters) becomes
material, it should be disclosed consistent with the guidance in ASC 450-20-50. Until then,
we believe our aggregated discussion provides contingency disclosures consistent with the
requirements of ASC 450-20.

    When evaluating the need for disclosure of reasonably possible losses under the guidance of
ASC 450-20-50-4, we judgmentally determined the reasonably possible losses were not material
to ConocoPhillips at December 31, 2010. Although the single aggregated amount of all
reasonably possible losses might be material to the results of an annual or interim period,
we believe it is remote that any individual case, or group of cases, would settle within a
single annual or interim period such that they would have a material impact on our financial
statements. We continue to employ a rigorous process to evaluate claims, establish accruals and identify any matters
appropriate for disclosure under ASC 450-20.

U.S. Securities and Exchange Commission

August 3, 2011

Page 4

In response to your request, I hereby acknowledge each of the following:

    1.

    The adequacy and accuracy of the disclosures in the above filing is ConocoPhillips’
responsibility.

    2.

    The Staff’s comments or the changes to disclosure we make in response to the
Staff’s comments do not foreclose the Commission from taking any action on the above
filing.

    3.

    ConocoPhillips may not assert the Staff’s comments as a defense in any
proceedings initiated by the Commission or any person under the federal securities
laws of the United States.

An electronic version of this letter has been filed via EDGAR.

Very truly yours,

    CONOCOPHILLIPS

    /s/ Jeff W. Sheets

    Jeff W. Sheets

    Senior Vice President, Finance

and Chief Financial Officer

    cc:

    Mr. James E. Copeland, Jr.

     Chairman of the Audit and

     Finance Committee

Mr. James J. Mulva

      Chairman and Chief Executive Officer

Ms. Janet Langford Kelly, Esq.

      Senior Vice President, Legal,

      General Counsel and Corporate Secretary

Ms. Glenda M. Schwarz

      Vice President and Controller

Mr. Andrew R. Brownstein, Esq.

     Wachtell, Lipton, Rosen & Katz

Mr. Timothy T. Griffy

      Ernst & Young LLP