The Return of Phillips Petroleum?

July 15, 2011

Some fellow Bartlesville teachers and I were on a summer lark, touring the Marland Mansion in Ponca City, when we heard the big news: ConocoPhillips is breaking up. It seems fitting that we heard the news at the mansion, since Marland Oil blended with Continental Oil Company in 1929 to become the well-known Conoco brand until it merged with Bartlesville’s own Phillips Petroleum in 2002. It will be interesting when, a decade after the merger, we see two separate and non-integrated companies emerge.

Click the image below for a history of some of the larger mergers and branding that formed what we know as ConocoPhillips today.

ConocoPhillips History (click image to enlarge)

Any changes in ConocoPhillips are big news for us since Bartlesville, where I’ve lived and taught for 23 years, is still dominated by the company. Bartlesville was the world headquarters for Phillips Petroleum for 85 years from 1917 until 2002, with the company employing over 9,000 Bartians in 1981 although that number had dropped to about 2,400 by 2001.

In 2002 Phillips merged with Conoco and the Phillips refining, wholesale marketing, and exploration and production divisions left Bartlesville for Houston. But local employment levels remained fairly stable and then grew somewhat to reach about 3,000 today. Bartlesville became a global support center for the company, handling accounting, information technology, human resources, and finance operations. The company’s research and development center remained in Bartlesville, which is also home to Chevron Phillips Chemical Co. research and development operations. The fate of Chevron Phillips and other joint ventures is not yet determined. Meanwhile, Ponca City endured heavy job losses as the company’s operations there contracted to concentrate on the local refinery.

Phillips and Conoco were integrated petroleum companies for many years, but recently ConocoPhillips has been shedding some of its refining operations and now it will separate into two companies. One will be upstream exploration and the production and the other will be downstream refining and marketing.

ConocoPhillips CEO Jim Mulva, who lived and worked in Bartlesville during the early part of my career here, said both of the new upstream and downstream companies would have their support services in Bartlesville, at least for now. We’ll see how this plays out.

One radio report claimed the upstream company would be called Conoco and the downstream company would be called Phillips, but in his remarks to investors Mr. Mulva referred to the new upstream company as ConocoPhillips with the downstream company unnamed at the time. So even if we did see a revival of Phillips Petroleum, it would not be the sort of integrated petroleum company it was prior to 2002.

UPDATE:

They eventually decided to name the downstream company Phillips 66, so here’s an updated graphic: