ConocoPhillips has announced the name of its new downstream company and its latest pipeline asset sale causes a market boost.
The new refinery organisation, which was established after the Houston-based oil producer decided to reposition its business earlier this year, will be called Phillips 66 and will be headquartered in Houston, with the specific location to be announced later.
The split created the world's largest individual exploration and refinery operations virtually overnight and follows a trend of similar organisations considering separating their upstream and downstream activities. The full respositioning is expected to be completed by Q2 of 2012 subject to regulatory approvals and market conditions.
According to the new company, the Phillips 66 name has "strong brand recognition and value and it provides a link between our rich history and our exciting future. [It]reflects an independent spirit and drive – two attributes of our future company.”
Although the organisation will sit alongside its exploration partner in Houston, Phillips 66 will also maintain a "significant" presence in ConocoPhillips' original home of Oklahoma, with a new global technology centre and transaction services being sited there.
Meanwhile ConocoPhillips has added the sale of $2bn worth of pipeline assets to its stated $15-20bn divestment programme running until 2012. The sales of its Colonial Pipeline Company and Colonial Ventures interests to Canada's CDPQ, along with selling its interests in the Seaway Crude Pipeline Company to Enbridge subsidiary, Enbridge Holdings, takes Conco's current sales sheet to around $10bn.
The Enbridge sale appears to have boosted US oil prices after Enbridge stated that the pipeline flow, which currently pumps crude from the Gulf Coast to storage in Cushing, Oklahoma, is set to be reversed. This led to West Texas Intermediate (WTI) crude prices surging towards Brent crude parity as the markets took stock of the fact that the pipeline will provide an additional 150,000 barrels/day of crude supply to the Gulf refineries by Q2 2012.