Chairman and Chief Executive Officer at ConocoPhillips
Thank you, Mark. So 2021 was a truly remarkable year for ConocoPhillips. Our operating performance around the globe was outstanding, we generated strong returns on and of capital for our shareholders and closed on two significant, highly-accretive acquisitions in the heart of the Permian Basin. Our exceptional results last year are directly attributable to the talent and dedication of our global workforce. We produced 1.6 million barrels per day and brought first production online at GMT2 in Alaska, the third Montney well pad and the Malikai Phase two and S&P Phase two projects in Malaysia. We also completed the Tor II project in Norway and achieved all of this with excellent cost, schedule, safety and environmental performance. Financially, we achieved a 14% full year return on capital employed or 16% on a cash adjusted basis and generated $15.7 billion in CFO, with over $10 billion in free cash flow.
And we returned $6 billion to our shareholders, representing 38% of our cash from operations. We also continued our rigorous portfolio optimization work, completing the truly transformative Concho and Shell Permian acquisitions and further high-grading our asset base around the world. In the Asia Pacific region, we exercised our preemption right to acquire an additional 10% in APLNG and announced the sale of assets in Indonesia for $1.4 billion. In the Lower 48, we generated $0.3 billion in proceeds from the sale of noncore assets last year and last week, we signed an agreement to sell an additional property set, outside of our core areas for an additional $440 million. Collectively, these transactions reduced both the average cost of supply and the GHG intensity of our more than 20 billion-barrel resource base and we're well down the road towards achieving our $4 billion to $5 billion in dispositions by 2023.
In early December, consistent with our 10-year plan and capital allocation priorities, we announced a returns-driven capital budget for 2022 that's expected to deliver modest growth this year. We also introduced a new variable return of cash, or VROC, tiered to our distribution framework and provided a full year target of $7 billion in total returns of capital to our shareholders. Based on current prices on the forward curve, we've increased the target to $8 billion, with the incremental $1 billion coming in the form of increased share repurchases and a higher variable return of cash. The $0.30 per share VROC announced for the second quarter represents a 50% increase over our inaugural variable return to shareholders that we paid this quarter. Now to put the $8 billion in perspective, it equates to an increase of more than 30% from the $6 billion returned last year and a greater than 50% increase in projected cash return to shareholders.
Our three-tier distribution framework provides a flexible and durable means to meet our returns commitment through the price cycle and truly is differential to others in this sector as our returns commitment is based on a percentage of CFO and not free cash flow. And as you know, we are guided in everything we do by our triple mandate. We must reliably and responsibly deliver oil and gas production to meet energy transition pathway demand. We need to generate competitive returns on and of capital for our shareholders and achieve our Paris-aligned net zero ambition by 2050. Just as I'm very proud of the excellent operational and returns-focused performance we delivered in 2021, I'm equally pleased about the progress we have made in support of the third pillar of our mandate.
We increased our medium-term emissions intensity reduction target to 40% to 50% by 2030 and expanded it to include both gross operated and net equity production. As a reminder, we're also committed to further reducing our methane emissions and achieving our 0 routine flaring ambition by 2025. And as highlighted in our December release, we've allocated $0.2 billion of this year's capital program for projects to reduce the company's Scope one and two emissions intensity and investments in several early-stage, low-carbon opportunities that address end-use emissions. We strongly believe that this level of focus on and performance toward is fully realizing our triple mandate as ConocoPhillips is very well positioned to not just survive through the energy transition, but to thrive regardless of the pathways it takes. While we're on the topic of energy transition, I'd like to touch on the macroenvironment.
Commodity prices today reflect global energy demand returning to pre-pandemic levels, along with supply being impacted by decreased investment in oil and gas over the past couple of years, concerns about inventory levels, and the amount of available spare production capacity in the system. All these factors demonstrate the ongoing importance of our sector to the global economy today and for the foreseeable future. It's becoming increasingly clear that the energy transition isn't going to happen with the flip of a switch. What people and businesses around the globe need is a managed and orderly transition, but that's not what the world is seeing to this point. Supply and demand balances are fragile at the moment, likely driving continued volatility and the current commodity price situation in Europe may be providing a cautionary signal.
The simple reality is that most alternative energy sources still have a long way to go towards becoming as scalable, reliable, affordable and accessible as the world needs them to be, which brings me back to our triple mandate and the importance of performing well across all three of the pillars, for our shareholders and for the people in the world who need and use our products.
Now with that, let me turn the call over to Bill, and he will cover the fourth quarter and our 2022 outlook.