Skip to comments.Newly independent ConocoPhillips will expand in North America, CEO says
Posted on 05/10/2012 5:31:38 AM PDT by thackney
In ConocoPhillips first shareholders meting since it unhitched its refinery business, new CEO Ryan Lance said hes focused on further expanding the companys position in North American shale and other unconventional fossil fuels.
Much of the $15 billion Lance plans to funnel into capital spending each year will target oil and natural gas operations in the United States and Canada. The Eagle Ford shale in south Texas, the Permian Basin in West Texas and the Bakken shale in North Dakota will be growth priorities, he said.
With the land ownership and the infrastructure that we have in the United States, it allows our company to secure a position and start developing and rapidly exploiting the assets, Lance said in a press conference following the shareholders meeting. We are putting a significant amount of our capital investment in that area and generating very high returns.
Lance takes the helm at the newly independent oil and gas exploration and production company with ambitious goals to expand production and maintain high dividends. Last week, ConocoPhillips refineries, pipelines and chemical plants spun off to form a separate company, Phillips 66.
The global oil and natural gas corporation currently produces about 1.6 million barrels of oil equivalent per day and plans to grow to 1.8 million by 2016, Lance told shareholders.
However, growth in North America will come from crude oil and natural gas liquids.
ConocoPhillips has scaled back its investment in dry natural gas, or methane, as the fuels domestic price has plummeted in recent months.
North American natural gas makes up about 24 percent of the companys portfolio and Lance said its share will decline. However, Lance said he believes growing use of natural gas in power generation, to replace coal, will reignite demand for the fuel. The company is holding on to acreage in gassy areas so it can restart production if prices rebound.
You dont invest in North American natural gas today given the price, Lance said. But we do believe over the longer term, demand will pick u, prices will improve and then we have the optimality to start reinvesting in that business and ramping up the growth.
If we don’t get rid of 0bummer in November, it’ll all be a moot point anyway for CP and everyone else. There’ll be no exploration or drilling anywhere - it’ll all be shut-down - if he/they get another 4yrs.
Nor was Colorado, since we have new and ridiculously expensive fracking regulations, thanks to our governor. He was a geologist, so he should know better. Sigh...
Some people like to say Obama did that and some people say Bush did that. The reality is that whatever Bush and/or Obama did or didn't do were merely incidental.
The increase in oil production came about because of two things.
1. Development of high pressure fracing technology
2. Quadrupling of the price of oil from $25/bbl to $100/bbl
Likewise look at the bitumen oil being produced in the Alberta tar sands. When Bush entered office and oil was at $25, the profit on that oil was marginal. As the price and margin gradually increased, oil sands production gradually increased. Now at $100 they are producing so much bitumen oil they need a pipeline.
Now let me connect the dots for you.
The new pipeline to the gulf coast and the new natural gas export terminals on the gulf coast are tied to the completion of the expansion of the panama canal so these products can easily get into the Pacific and onto Asia.
Europe is closer and very interested in sources other than Russia and OPEC.
OTOH, Cheinere is already diverting their imported gas to Europe.
The gulf coast doesn't have a lock on the asian market. Alaska wants part of it. Canada wants to get their natural gas to the pacific, possibly to WA since they have announced an export terminal there.
I don’t see our export volume in petroleum to be significant over the next couple decades.
In LNG export, competing with Russia and Australia along with transportation distance will keep Europe as a more profitable customer.
What percentage of this company is owned by Venezuela and Hugo Chavez????
ConocoPhillips? Mostly mutual funds and retirement plans.
CONOCO Phillips is number 5 on the Forbes 500 that was just released.
That might be part of the reason that Obama has opposed the Keystone Pipeline. He wants to see the oil go to China, not Europe, or even our own East Coast, which is becoming more and more dependent on Russian oil, as US refineries shut down at a rapid pace on the East Coast. I hear that Luk oil is now the most common gas station in the Philadelphia area, a city that has had several refineries since the mid 19th century.
As for oil/gasoline/diesel, that depends on whether EVs/hybrids penetrate the market or gasoline/diesel is the route. We are exporting record amounts of gasoline and diesel. Or, the rising CAFE standards could be relaxed. Or, methane hydrate technology could be around the corner
Was the Forbes list based upon size prior to split?
It like was as the official spin off of refining was May 1, 2012.
Yes, we finally reached our WW2 amounts last year.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFEXUS2&f=M Yes, keep in mind that net export is based upon our import of surplus oil as well as surplus refining capacity.
You speak of a lot of different possible changes. I agree that this market is very hard to predict and can be greatly influenced by many different source.
My original comment to you was based on my opinion I didn't consider the Panama Canal expansion significant to the decision of other projects, particular pipeline or LNG export.
I imagine that it was before the split, but the thinking is that the split is very good for the upstream and not so good for the down stream people. Interestingly, one of companies that have expressed an interest in buying one of the CONOCO Phillips refineries is Walmart. Wouldn’t that set the leftists off in a tizzy? Imagine Walmart, not only selling gas, but refining their own gasoline.
BP has been trying to get out of the downstream end of the business for years but hasn’t been able to sell the refineries. Most of the oil companies would like to do the same thing.
A Canadian company owns the Race Trac stations in Tx, Ok, and Ar. Kuwait owns the Q8 stations in Europe. Alon Energy the Iraeli Company owns all the gas stations previously owned by Fina and Total(foreign companies) in Texas and OK. Alon also bought refinery in Big Springs which was owned by Fina who bought that refiney from the old Cosden Oil company
I still remember that for many years Fina stations and Total stations were cheapest place to buy gas in DFW, but when Alon took those stations over the price went up, and Race Trac moved into that area and became the cheapest.
I also remember 1998 when, because the asian economy nose dived, the world price of oil collapsed from $25 to $12 and you could buy gasoline for 65 cents per gallon in DFW.
I also remember how the price of crude and gasoline increased in the oughties until I was paying $3.97 a gallon in June 2008. Then the economy began to collapse and oil and gasoline prices collapsed. Crude fell to $44/barrel and I paid $1.63 per gallon in Dec 2008. Of course the economy gradually improved from that point and oil/gasoline went back up
I understand, we will just have to disgree, but I promise not to call you a RINO, globalist, or any other perjorative term.
I think that Alon might be the name of the company that just bought one of the Conoco Refineries, along with a pipeline. I had never heard of them. Part of the push to divest the refineries is because of the Obama administration war on big oil. It’s difficult to bring aging refineries up to current standards. Think about it, some of those refineries in Philadelphia had been on the same site since 1860 something.
I just read that Delta Airlines bought the old Conoco Refinery at Marcus Hook, which I believe used to be SUNOCO.
Sorry, that was bad information about ALON.
Delta Airlines did buy the Marcus Hook refinery, though and there is another deal close for the SUN refinery in Philadelphia that would keep that refinery on-line.
The investors are all crying the blues over the new players in the refining industry. It seems that they are all worried that increased refining capacity will decrease profit margins and throw a curve ball into the futures market.
New players in the refining business could really change the industry, players like Delta, refining their own fuel for themselves and all their partners. They got the refinery for a very low price, too. Walmart refining their own gas would be a big deal, as well.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.