Business

ConocoPhillips To Split Into Two Separate Companies

Houston-based ConocoPhillips, the nation's third-largest oil company, says it will split into two separate firms. From the KUHF Business Desk, Andrew Schneider has the story.

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ConocoPhillips’s board has approved the spin-off of the company’s refining and marketing operations in a tax-free transaction. That will leave Conoco as an exploration and production company only.  

Matti Teittinen is an analyst with research firm IHS Herold. Teittinen says that Conoco share prices are undervalued compared to those of its peers in the industry, despite the run up in oil prices in recent years.

“And this is sort of an effort to try to create more shareholder value. Obviously, it comes on the heels of the Marathon Oil split off a couple weeks back, so they’re trying to capture some of that success. And it could potentially lead to further deintegration within the industry for those underperforming majors.”

The Houston-based company has about 29,000 employees.  Barbara Shook, Houston bureau chief for the Energy Intelligence Group, says the split may wind up creating jobs.

“Because you have to have two human resources departments, two accounting departments, two safety departments, all the way down the line, the administrative and support departments, two IT departments, and you don’t get the economies of scale that you do when you combine organizations.”

Shook says it’s unclear, though, how many of those jobs will land in Houston and how many in Bartlesville, Oklahoma. Bartlesville was the headquarters of Phillips Petroleum prior to its 2002 merger with Conoco.

Conoco says its separation plans do not require a shareholder vote. The separation is expected to be completed in the first half of next year. Chairman and CEO Jim Mulva plans to retire following the split.

From the KUHF Business Desk, I’m Andrew Schneider.

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Andrew Schneider

Andrew Schneider

Politics and Government Reporter

Andrew heads Houston Public Media's coverage of national, state, and local elections. He also reports on major policy issues before the Texas Legislature and county and city governments across Greater Houston. Before taking up his current post, Andrew spent five years as Houston Public Media's business reporter, covering the oil...

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