Oil Breakup: ConocoPhillips be pure-play, spins off refining

Oil Breakup: ConocoPhillips to be pure-play, spins off refining

4:09 PM, 15th July 2011
Oil Breakup: ConocoPhillips to be pure-play, spins off refining

 

HOUSTON, US: ConocoPhillips intends to separate into two separate businesses and when the move is complete Chief Executive Jim Mulva will ride off into the sunset.

The oil company’s chief will retire following the split of Conoco’s upstream and downstream operation. In a bid to unlock value, ConocoPhillips is planning to spin off its refining and marketing operation to shareholders as a new publicly-traded company.

Thursday’s announcement is not without precedent - Marathon Oil completed the spinoff of its refining business Marathon Petroleum at the end of June - but Conoco is certainly the largest oil company to pull the maneuver thus far, with a market cap of more than $113 billion.

In a conference call following Thursday’s announcement, Conoco said the transaction, expected to close in the first half of 2012, will make it the largest pure-play exploration and production oil company in the US. Of course that will only last as long as the other major integrated giants, Exxon Mobil and Chevron, keep both sides of their operation under the same tent.

Shares of Conoco, which also said it plans to sell another $5 billion to $10 billion in assets and buy back more than $10 billion in stock over the next year-plus, were up 4.5 per cent.

© Forbes News

 

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