After announcing plans in July to split in two, ConocoPhillips on Friday revealed the executives who will head the two stand-alone companies created by the move.
Ryan M. Lance will be the chairman and CEO of ConocoPhillips, the oil and gas exploration and production company, while Greg C. Garland will become chairman and CEO of the independent oil refining firm. Both have spent decades in the oil and natural gas industry.
Jim Mulva, the current chairman and CEO of the nation’s third-largest oil company, will retire once the separation is completed in the second quarter of 2012.
With the appointments, ConocoPhillips fills in two more important blanks in its spin-off strategy that had been the source of intense speculation by analysts and the media. Last month, the company also provided more clarity about the assets that will travel with the new refining firm, saying, in addition to 16 refineries, it will take ownership of pipeline and chemical joint ventures. However, ConocoPhillips still has not said if the headquarters for its new refining company will be in Houston or elsewhere.
Lance is the current senior vice president of international exploration and production for ConocoPhillips. He has worked for more than 26 years in the oil and natural gas business, and he also worked in senior management for Phillips Petroleum.
In a statement, he said he was honored to lead the company into next phase of its long history and did not signal any immediate changes.
“ConocoPhillips will retain the size, scale and capability to pursue any project globally, with the additional benefit of greater focus,” he said. “With our enhanced balance sheet and strong capabilities, we will pursue the goals of the repositioning plan, including investing in good opportunities, maintaining capital discipline, and continuing to return available cash to shareholders.”
ConocoPhillips, which sold $7 billion in assets last year, has plans to sell up to $10 billion more by the end of next year as it focuses on boosting shareholder value, partly through stock buybacks.
The company, which expects to spend $13.5 billion on drilling and other oil and gas projects in 2011, has said it may raise its global capital budget next year to between $14 billion and $15 billion.
Brian Youngberg, an analyst who follows ConocoPhillips for Edward Jones, said the selection of Lance signals that the company is looking beyond its large footprint in North America to fast-emerging markets in Asia, Australia and elsewhere for growth.
“Demand growth for energy is going to be international, and you want to be close to where that growth is,” he said, noting Lance’s strong operations background could be an asset.
Garland is the senior vice president of Americas exploration and production for ConocoPhillips. He served as the CEO for Chevron Phillips Chemical Company, a 50-50 joint venture between Chevron and ConocoPhillips.
He joined ConocoPhillips in October, along with Alan Hirshberg, a former executive with Exxon Mobil, who was viewed as a top contender for the CEO job at the upstream oil and gas company.
“The repositioning will create a standalone company with a unique, diverse and highly competitive portfolio of segment-leading businesses,” said Garland. “I look forward to the opportunity to drive superior shareholder value in the downstream company by operating world-class assets with ConocoPhillips’ philosophy of capital discipline and a strong dividend policy.”
Youngberg expects Garland to boost capital spending on the chemicals and pipeline joint ventures, where there are “significant growth opportunities over time,” while reducing the company’s exposure to the volatile refining business.