ConocoPhillips has become an oil major in two sectors overnight after announcing it will split its devisions.
The company, which ranked sixth amongst the world's oil companies, now gives its name to the world's largest refinery and exploration/production companies as it split its two businesses.
The $107bn Conoco business will be split into separate refining and marketing and oil exploration and production businesses with the aim of attracting new investment and boosting the market valuation of both companies. More importantly, the move lifts the two businesses to the top of the league for each sector, ahead of the 'majors' ExxonMobil, Shell and Chevron.
The move was given a mixed reception amongst financial analysts, owever some believe that it will release some of the latent value in Conoco's exploration and production activities. The process is expected to be completed by the middle of 2012 at which time Chairman and CEO, Jim Mulva, will retire.
The announcement comes after a similar move was completed earlier this month by Houston-based Marathon Oil, despite Conoco apparently ruling out a de-coupling when the Marathon decision was first announced earlier this year.
With Shell and BP already selling off much of their retail activities and consolidating their operations, analysts will be watching carefully to see if Conoco will set a trend amongst the oil majors.