Separating upstream and downstream operations will make ConocoPhillips the largest independent refiner in the U.S.
ConocoPhillips has announced it plans to split its business in two, separating its upstream and downstream operations, the Wall Street Journal reported.
The news that the company will separate its refining-and-marketing assets from its energy and power companies sent shares of ConocoPhillips soaring about 10.6% in pre-market trading.
The move will make ConocoPhillips the biggest U.S. independent refiner with a capacity of 2.5 million barrels of oil per day, displacing Valero—now the biggest refiner at 1.8 million barrels a day.
The separation could also increase ConocoPhillips stock by at least 20% in the next two months, Fadel Gheit at Oppenheimer told the Wall Street Journal. After Marathon conducted a similar split, its stock is 41% higher this year.
ConocoPhillips plans to reduce its refining capacity over a two year period ending in 2012, according to Reuters.
In connection with the split, ConocoPhillips executive Jim Mulva plans to retire as CEO, the Wall Street Journal reported. He started his career at Phillips Petroleum Co. more than 35 years ago.