Possible ConocoPhillips refinery sale could help pay debt projects

01 December 2011 22:53  [Source: ICIS news]

HOUSTON (ICIS)--ConocoPhillips could be looking to sell a second refinery in a year’s time in order to pay for recent refinery projects and shed $10bn-15bn (€7bn-11bn) in assets during 2010-2012, said an analyst on Thursday.

There has been market speculation that ConocoPhillips will put its 247,000 bbl/day Alliance refinery in Louisiana on the selling block in 2012.

The company plans next year to spin off its refining and chemicals business - Phillips 66 - so that ConocoPhillips may become a pure-pay exploration and production company.

“They spent $3.8bn on refinery modernisation at [its Wood River refinery in Illinois], and they want to recoup some of that capital by selling other refineries to improve their balance sheet, perhaps by using cash from sales to reduce their debt,” said analyst Dan Lippe with Petral Worldwide.

The company announced its reduction in assets from 2010-2012 as part of its plan to expand upstream exploration and production.

Phillips 66 will likely become the largest US independent refiner after its spinoff from ConocoPhillips in 2012. The sale of the Alliance refinery, in addition to the shuttering of the 185,000 bbl/day Trainer refinery in Pennsylvania and the sale of its 260,000 bbl/day Wilhelmshaven refinery in Germany would reduce Phillips 66’s refining capacity by about 700,000 bbl/day.

The Trainer refinery was put up for sale in September, and the company began idling the plant. The company has it for sale.

Another analyst, president Anne Keller of Midstream Group, said: “They announced a long time ago that they would be looking at all [of] their refinery assets to see if they needed to make changes.”

ConocoPhillips did not reply immediately for comment.

($1 = €0.74)

By: Sheena Martin
+1 713 525 2653

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