Issue Date: July 25, 2011
CPChem’s Fate Unsure in ConocoPhillips Split
ConocoPhillips’ plan to divide into two independent companies has left undecided the fate of the firm’s polypropylene business and its Chevron Phillips Chemical (CPChem) joint venture with Chevron. ConocoPhillips plans to carve its refining and marketing operations into a separate publicly owned firm sometime in the first half of 2012. The firm will remain a “pure play” exploration and production company. The split will improve shareholder returns, it says. But at this early stage, ConocoPhillips, which had sales of $189 billion in 2010, has not yet figured out exactly how it will break up its assets. Up in the air is the home of ConocoPhillips’ 50% interest in CPChem, a maker of aromatics, α-olefins, and polymers with $11.2 billion in 2010 sales. Also undecided is which of the two new firms will get a polypropylene operation at the Bayway Refinery in Linden, N.J. ConocoPhillips has teams working on details now, a spokesman says. They will have to take into account locations shared by ConocoPhillips and CPChem. For instance, ConocoPhillips operates a refinery in Sweeny, Texas, where CPChem runs ethylene and propylene units. CPChem has a refinery in Borger, Texas, where it makes organosulfur chemicals, solvents, and mining chemicals.
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