It is not every day that a Major company shakes up its Oil&Gas business model and introduce a new brand to re-position its strategy and consolidate its Market Leadership.
But in July 2011, ConocoPhillips had announced to spin off all their Midstream and Downstream activities under the name of Phillips 66. On May 1st, 2012 they do it.
Created in 1917, Phillips 66 revives as a listed company this May 1st, 2012. It will be publicly traded as such while ConocoPhillips will then focus exclusively on Exploration & Production.
The actual shareholders will receive shares from both companies to be traded separately.
James J. Mulva, the Chairman, President and CEO of ConocoPhillips said: “The repositioning will help grow the value of both companies for our shareholders by unlocking the potential of their assets and employees. We believe this is the best way to succeed and ensure our competitiveness over the long term.”
In practice, Phillips 66 will cover the:
– Storage and transportation activities with pipelines, trucks and vessels, Gas gathering and processing through DCP MIdstream, LLC.
– Power Generation
– Refining and Marketing business
– Petrochemical and Chemicals assets in line with the Chevron Phillips Chemical Company, LLC
The goal of this operation is to redefine the positioning of each sector and to release the respective potential resources to create more value for the shareholders through this new Oil&Gas and Petrochemical Business Model.
In many conglomerates the shareholders like to question if the consolidated value of a particular group should not be much higher in splitting activities, but very few dare to try it in practice as there is no way back.
In 2004 the French Group Total had done it in creating Arkema to spin off their chemical activities, today it is a success for both companies.
ConocoPhillips is expecting to increase capital expenditure from $12.7 billion in 2011 to $14 billion in 2012, we wish to the new ConocoPhillips and Phillips 66 a great success in their respective new life.
ConocoPhillips is headquartered in Houston, Texas, USA. The company had approximately 29,800 employees, $153 billion of assets and $ 245 billion revenues in 2011.
