Will Oil Majors Follow ConocoPhillips' Lead?

We believe none of the other oil majors are likely to follow ConocoPhillips in its decision to end its run as an integrated firm

Allen Good 19 July, 2011 | 10:18AM
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ConocoPhillips' (COP) decision last week to end its run as an integrated firm by spinning off its downstream assets likely has investors wondering who will be next. In our opinion, none of the other majors are likely to follow ConocoPhillips' lead, though a couple may make viable candidates. Most notable in our opinion is BP (BP.) The company's struggles over the past year and half are well-documented and recent management missteps in Russia have likely compounded problems. A spin-off of its downstream assets may revitalise shares that currently trade at a substantial discount to peers'. The second most likely candidate in our opinion is Chevron (CVX). However, the company has already aggressively divested downstream assets during the last year, leaving it with much less investment. We view the remaining majors as unlikely to spin off any part of their businesses.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BP PLC377.75 GBX-0.38Rating

About Author

Allen Good  Allen Good is a senior stock analyst covering the oil and gas industries.

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