ConocoPhillips has announced that it will split its refining business from the main body of the company by the end of June, with the stated aim to focus on upstream projects.
The spinoff will allow the company, which had revenues of US$ 189 billion in 2010, to focus on oil and gas exploration and production projects, which aren’t as subject to the seasonal and macroeconomic fluctuations inherent to the refining industry. These upstream projects include drilling for crude and natural gas in Texas, Norway, China and the UK.
However, at this early stage the firm has said it had not yet figured out exactly how it would split assets between the two firms. Up in the air is which of the two will get the 775 million lb /year polypropylene operation at the Bayway refinery in Linden, New Jersey. Also undecided is where ConocoPhillips’ 50% interest in CP Chem, a maker of aromatics, alpha olefins, styrenics, and polymers with US$ 11.2 billion in 2010 sales, will go.
ConocoPhillips follows Marathon Oil, Chevron, ExxonMobil, BP and Royal Dutch Shell in seeking to shrink or exit refining businesses. With 97% of its crude processing capacity located in the US and Europe, Houston based ConocoPhillips’s refineries will face acute competition from new plants in emerging markets such as India that are proximate to the rapidly growing market in China.
In other ConocoPhillips news, a planned flaring event will take place between July 18 and July 27 at the company’s 140 000 bpd refinery in Wilmington, California, according to the South Coast Air Quality Management District. It is not known which unit, or units, will be affected.