ConocoPhillips announced last week that it will separate its upstream and downstream businesses into two separate, publicly-traded corporations. Refining and marketing, including base oil and lubricants businesses, will be spun off to shareholders.
The upstream exploration and production company will keep the ConocoPhillips name. The separation, expected to be completed by mid-2012, will not require a shareholder vote.
The base oil and lubricants businesses are important assets for ConocoPhillips, a company spokesperson told Lube Report, but he had no further comments on the impact of the separation on these businesses. Still to be decided are the name of the new company, where it will be headquartered, and who will run it. Teams are assessing the process now, he said, and decisions will be made and communicated over the coming months.
In its July 14 announcement, ConocoPhillips said the new downstream company will improve downstream returns through portfolio rationalization and other operating efficiencies.
ConocoPhillips says it is the fourth largest finished lubricants supplier in the United States. Its lubricant brands include Conoco, Phillips 66, 76 Lubricants and Kendall Motor Oil.
ConocoPhillips supplies API Group II base oils from the Excel Paralubes refinery in Lake Charles, La. ConocoPhillips is a 50 percent owner of the 22,000 barrel per day base oil plant; Flint Hills Resources holds the other 50 percent and also markets base oils from the plant.
In addition, ConocoPhillips is the exclusive North American marketer of Ultra S-branded Group III base oils from Korean refiner S-Oil.
Consistent with our strategy to create industry-leading shareholder value, we have concluded that two independent companies focused on their respective industries will be better positioned to pursue their individually focused business strategies, said Jim Mulva, chairman and CEO, who will retire on completion of the separation.
Headquartered in Houston, the company has about 29,600 employees, $160 billion in assets and $226 billion of annualized revenues as of March 31, 2011.