Maybe this spooked a few people:
Conoco details plans to sell assets
By Sheila McNulty in Houston and Bernard Simon in Toronto
Published: October 28 2009 14:08 | Last updated: October 28 2009 23:45
ConocoPhillips, the third largest US oil company, outlined plans to sell $10bn worth of assets over the next two years on Wednesday, including its 9 per cent stake in the Syncrude oil sands project in Canada.
Jim Mulva, chief executive, said Conoco also would sell the bottom-performing 10 per cent of its exploration and production assets in Canada and the continental US, some natural gas assets in the North Sea, and pipelines and terminals in the US.
“We have received a lot of phone calls,” he said. “We think that what we have in mind is achievable.”
The asset sale programme was announced earlier this month, along with a $1.5bn cutback in 2010 capital spending.
The company this year pledged to scrap its growth-through-acquisition strategy to focus on organic growth.
The flaws in that strategy emerged when falling commodity prices forced it to take a $34bn writedown on the reduction in its asset values at the start of the year, cut 1,300 jobs, and scale back capital expenditures to $12.5bn this year from $15.3bn in 2008.
Mr Mulva said Conoco would not cut spending in exploration and production, which would receive 90 per cent of the $11bn in capital spending planned annually for the next few years.
The fall in oil and natural gas prices from last year’s highs is still taking its toll.
Conoco on Wednesday rep-orted earnings of $1.5bn, or $1 per share, in the third quarter, down 71 per cent from the year-earlier quarter.
Conoco’s shares fell $1.41, or 2.7 per cent, to $49.49.
ConocoPhillips’ stake in Syncrude is expected to attract interest both from companies that have a stake in the oil sands and from newcomers.
One likely bidder is Calgary-based Canadian Oilsands Trust, Syncrude’s biggest shareholder with 37 per cent. Its partners include, among others, ExxonMobil, Nippon Oil, Suncor and Nexen.
Chinese and South Korean oil groups have stepped up their interest in the oil sands as a way of securing future oil supplies.
Korea National Oil Corporation bought Harvest Energy Trust for $1.8bn earlier this month, while PetroChina paid $1.9bn for two oil sands projects.
The Alberta oil sands are estimated to contain the world’s biggest oil reserves after Saudi Arabia.
Mr Mulva said its full-year cost-reduction target of $1.4bn had been achieved, and said the company’s “refocused exploration programme” was delivering strong results, pointing to efforts in the Gulf of Mexico, onshore US shale gas and in Australia’s Browse Basin.
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