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ConocoPhillips(COP), one of the world’s six “supermajor” oil companies has decided that the benefits to vertical integration are not all they’re cracked up to be. The company announced today that it will be spinning off its refining business in the first half of 2012, leaving it as a pure-play exploration and production business. At the time of the spin CEO James Mulva will retire. As we see with many spinoffs, Conoco is a serial spinner, having itself been spun off from Dupont(DD) over a decade ago.
The split follows the same script as the recent Marathon spinoff and will create both the largest independent US refiner and the largest independent US E&P. The market’s initial reaction to the news is quite positive, with the stock up over 9% in premarket trading.
Disclosure: The author has no stake in any stock mentioned
