ConocoPhillips
ConocoPhillips is an independent exploration and production company headquartered in Houston, Texas, focused on discovering, developing, and producing oil, natural gas, and natural gas liquids on a global scale.[1][2] Formed in 2002 through the merger of Conoco Inc. and Phillips Petroleum Company, it evolved into a pure-play upstream entity in 2012 after spinning off its refining, marketing, and midstream businesses into Phillips 66, allowing concentration on high-return E&P activities.[3] As one of the world's largest independent E&P firms by production and proved reserves, ConocoPhillips operates across key regions including the Lower 48 onshore U.S., Alaska, Norway, the Asia Pacific, and the Middle East, with 2024 production averaging 1,987 thousand barrels of oil equivalent per day (MBOED) following the acquisition of Marathon Oil Corporation.[4][5] The company has pursued strategic growth through major projects like the controversial Willow development in Alaska, approved in 2023 for up to three drill sites despite environmental opposition, highlighting tensions between energy security and ecological concerns.[2][5] In fiscal 2024, it generated a 14% return on capital employed and returned $9.1 billion to shareholders, underscoring operational efficiency and shareholder focus amid volatile commodity markets.[5]History
Origins and Early Development (1875–2001)
The Continental Oil and Transportation Company, predecessor to Conoco, was founded in Ogden, Utah, in November 1875 by Isaac Elder Blake to import, transport, and market kerosene and other petroleum products to western U.S. territories via rail and horse-drawn wagons.[6][7] Initially focused on distribution rather than production, the company supplied pioneers in remote areas where local refining was absent.[8] In 1885, Continental Oil was acquired by the Standard Oil Trust, serving as a regional marketing subsidiary until the U.S. Supreme Court's 1911 dissolution of the trust, which restored its independence as the Continental Oil Company.[9] The firm then expanded into gasoline retailing, opening its first service station in 1914, and entered upstream production in 1916 through the acquisition of United Oil Company.[7] By the 1920s, Continental had developed refining capabilities and international interests. In 1929, the Marland Oil Company gained control and rebranded the entity as Conoco, establishing it as an integrated oil enterprise with operations spanning exploration, production, refining, and marketing.[7] Conoco grew through postwar acquisitions of fields and facilities in regions including Louisiana, Canada, Libya, the North Sea, Dubai, and Indonesia, solidifying its global footprint.[10] In 1981, E.I. du Pont de Nemours and Company purchased Conoco in the largest U.S. corporate merger to date, valued at approximately $7.7 billion, integrating it as a subsidiary focused on energy assets.[6] DuPont divested Conoco in 1998–1999, reestablishing it as an independent publicly traded company, Conoco Inc., with renewed emphasis on exploration and production amid volatile oil markets.[6] The Phillips Petroleum Company was incorporated on June 13, 1917, in Bartlesville, Oklahoma, by brothers Frank Phillips and L.E. Phillips to consolidate their wildcatting ventures, including the Anchor Oil and Gas Company, into a structured entity amid Oklahoma's booming oil fields.[6][11] Early operations emphasized crude production and natural gas processing; in 1917, Phillips built a plant near Bartlesville to extract liquid hydrocarbons from natural gas for motor fuel applications, pioneering natural gas liquids commercialization.[12] By 1927, the company commissioned its first refinery in Borger, Texas, targeting gasoline output for the growing automotive sector.[13] During World War II, Phillips ramped up production of high-octane aviation gasoline, supporting Allied air forces and advancing catalytic cracking technology.[6] Postwar diversification included petrochemicals; in the 1930s–1950s, Phillips researchers developed polyethylene plastics, launching a chemicals division that complemented core oil and gas activities.[6] The company expanded refining and marketing under the Phillips 66 brand, derived from a 1927 test yielding 66 octane gasoline, while pursuing upstream growth in the U.S. and abroad. In 2000, Phillips acquired Atlantic Richfield Company's (ARCO) Alaska operations for $7 billion, bolstering reserves in Prudhoe Bay and other North Slope fields.[14] By 2001, Phillips operated as a major integrated energy firm with balanced upstream, midstream, and downstream segments.[11]
Formation Through Mergers (2002–2011)
ConocoPhillips was established on August 30, 2002, via the merger of Conoco Inc. and Phillips Petroleum Company, both longstanding U.S.-based oil firms.[15] The transaction, an all-stock deal valued at approximately $15 billion, had been announced on November 18, 2001, and positioned the new entity as the third-largest integrated oil company in the United States by assets and market value.[16] [17] Shareholders from both companies approved the merger in March 2002 with overwhelming majorities exceeding 96 percent.[18] The U.S. Federal Trade Commission cleared the merger on the same day it closed, imposing conditions that required divestitures of overlapping refining and marketing assets to maintain competition in specified markets.[19] Post-merger, ConocoPhillips integrated Conoco's global exploration and production strengths with Phillips' refining, chemicals, and midstream capabilities, forming a diversified portfolio spanning upstream, midstream, and downstream operations.[20] Headquartered in Houston, Texas, the company began trading under the ticker COP on the New York Stock Exchange.[21] A pivotal expansion occurred in 2006 when ConocoPhillips acquired Burlington Resources Inc., an independent exploration and production firm, in a $35.6 billion deal comprising cash and stock.[22] Announced on December 13, 2005, the acquisition received Burlington shareholder approval and regulatory clearances, culminating in completion on March 31, 2006.[23] This move substantially bolstered ConocoPhillips' natural gas reserves, particularly in key North American basins like the Gulf of Mexico, Permian Basin, and Western Canada, elevating it to a leading producer in the region.[24] Through these mergers, ConocoPhillips solidified its scale and resource base amid consolidating industry dynamics driven by volatile commodity prices and the need for operational efficiencies.[25] By 2011, the company's upstream focus had intensified, setting the stage for subsequent strategic realignments, though no additional major mergers occurred in the latter half of the decade.[26]Spin-Off and Refocus on Exploration and Production (2012–2020)
In April 2012, ConocoPhillips announced the spin-off of its downstream refining, marketing, and midstream operations into a separate entity named Phillips 66, enabling a sharpened focus on upstream exploration and production (E&P). The board approved the transaction on April 4, 2012, and it was completed on May 1, 2012, with ConocoPhillips shareholders receiving one share of Phillips 66 common stock for every two shares of ConocoPhillips stock owned.[27][28] This separation transformed ConocoPhillips into the world's largest independent E&P company, measured by proved reserves and production of liquids and natural gas.[3] Ryan M. Lance was appointed Chairman, President, and Chief Executive Officer effective upon the spin-off's completion, leading the company's strategic pivot toward high-margin upstream activities.[29] Post-spin-off efforts emphasized portfolio rationalization, prioritizing low-cost, resource-rich assets in key regions such as the U.S. Lower 48, Norway, Alaska, and Canada. Investments accelerated in unconventional shale plays, including the Eagle Ford, Bakken, and Permian basins, where production surged 31% from approximately 167,000 barrels of oil equivalent per day (boe/d) in the fourth quarter of 2012 to 218,000 boe/d in 2013.[30] The sharp decline in oil prices from mid-2014 prompted rigorous cost discipline, with ConocoPhillips halving its 2015 capital expenditures compared to 2014 levels and reducing its quarterly dividend by 86% in February 2016—the first cut in over 25 years—to preserve liquidity amid the downturn.[31][32] Complementary measures included workforce reductions, suspension of higher-risk exploration like 2014 Chukchi Sea drilling plans, and divestitures of non-core assets to streamline operations and reduce debt.[33][34] By 2020, these strategies had fortified the company's resilience, supporting advancements such as significant Norway discoveries, Montney acreage additions, and progression of major E&P projects while generating free cash flow from optimized assets.[35]Recent Expansions and Strategic Shifts (2021–Present)
In January 2021, ConocoPhillips completed its acquisition of Concho Resources Inc. for an enterprise value of approximately $13.3 billion, significantly expanding its position in the Permian Basin with access to over 1.1 million net acres and adding high-quality inventory. Later that year, the company acquired Shell's Delaware Basin assets for $9.5 billion in cash, further bolstering its unconventional production capabilities in the Permian with an estimated 250,000 barrels of oil equivalent per day of net production. These moves reflected a strategy to consolidate low-cost, resource-rich shale assets amid recovering oil prices post-2020 downturn. In 2023, ConocoPhillips acquired the remaining 50% interest in the Surmont oil sands project in Canada from TotalEnergies for about $700 million, gaining full operatorship and control over an estimated 600 million barrels of net recoverable bitumen resources. The company's largest expansion came in November 2024 with the $22.5 billion all-stock acquisition of Marathon Oil Corporation, including $5.4 billion in net debt, which added complementary acreage in the Eagle Ford, Bakken, and Permian basins, increasing U.S. onshore inventory by roughly 40% to over 10 years of drilling opportunities.[36] This transaction aimed to enhance free cash flow generation through synergies estimated at $1.5 billion over the first year, driven by operational efficiencies and reserve additions of 2 billion barrels of oil equivalent.[37] To optimize its portfolio post-Marathon, ConocoPhillips pursued divestitures of non-core assets, exceeding its $2 billion target by mid-2025. Notable sales included Indonesia operations for $1.355 billion in 2024 and Anadarko Basin assets for $1.3 billion in August 2025, generating proceeds to reduce debt and fund higher-return investments.[38] These actions underscored a shift toward capital discipline, including workforce reductions of up to 25% announced in September 2025 amid softening oil prices, prioritizing cost reductions of $2 per barrel relative to peers.[39] The company advanced its liquefied natural gas (LNG) strategy to capture growing global demand, securing multiple long-term offtake agreements. In 2022, it signed a 20-year deal for 5 million tonnes per annum from Sempra's Port Arthur LNG alongside a 30% equity stake, with startup targeted for 2027.[40] Further expansions included a 20-year agreement for 1 million tonnes per annum from NextDecade's Rio Grande LNG in September 2025 and additional Port Arthur Phase 2 volumes in August 2025, building a flexible supply network across Europe and Asia.[41] This approach leverages ConocoPhillips' gas production strengths without direct upstream commitments, focusing on marketing and trading. Major project developments included progress on the $7-7.5 billion Willow oil project in Alaska's National Petroleum Reserve, with federal approvals secured in 2023 and first oil on track for 2029, projected to yield 180,000 barrels per day peak production and $8-17 billion in government revenues.[42] In 2024, the company achieved first oil at new developments in Norway, Alaska, and China, enhancing diversified output.[5] These initiatives align with a broader emphasis on durable, low-cost reserves amid volatile commodity cycles.Operations
Core Business Model and Segments
ConocoPhillips operates as an independent exploration and production company, concentrating on the upstream segment of the energy industry by acquiring, exploring, developing, and producing crude oil, natural gas, natural gas liquids, bitumen, and liquefied natural gas across global assets.[2] Since the 2012 spin-off of its refining, marketing, and midstream operations into Phillips 66, the company has streamlined its model to prioritize high-return, low-cost-of-supply projects with low greenhouse gas intensity, supported by a strategy of disciplined capital discipline, reserve replacement through drilling and acquisitions, and cash generation for shareholder returns.[5] In 2024, this approach yielded total revenues of $56.953 billion, primarily from hydrocarbon sales, with crude oil comprising the majority at approximately 71% of product-line revenues.[5] [43] The company's operations are organized into six geographic segments, evaluated based on net income and aligned with its triple mandate of meeting energy demand, achieving competitive returns on capital, and reducing emissions.[5] [2] These segments encompass legacy production bases and development inventories in 15 countries as of December 31, 2024, with a focus on unconventional resources in North America and conventional assets internationally.[2]- Lower 48: The largest segment by production, encompassing U.S. onshore unconventional plays such as the Permian (Delaware Basin), Eagle Ford, and Bakken formations; in 2024, it delivered 1,152 million barrels of oil equivalent per day (MBOED), with 63% liquids, and generated $37.026 billion in revenues.[5]
- Alaska: Centers on North Slope assets including Prudhoe Bay, Kuparuk, and Willow; produced 194 MBOED in 2024 (14% of company liquids), with revenues of $6.553 billion, emphasizing low-carbon developments.[5]
- Canada: Focuses on oil sands (Surmont) and Montney gas; output was 164 MBOED in 2024 (10% of company liquids), yielding $3.514 billion in revenues.[5]
- Europe, Middle East and North Africa (EMENA): Includes Norwegian North Sea fields like Eldfisk and Qatar LNG equity; contributed 9% of company liquids in 2024, with $5.788 billion in revenues.[5]
- Asia Pacific: Targets conventional oil and gas in China (Bohai Bay) and Australia LNG; accounted for 4% of company liquids, generating $1.847 billion in revenues.[5]
- Other International: Covers diverse exploration and LNG opportunities globally; supports portfolio diversification without specified 2024 production breakout.[2]
Geographic Operations and Key Assets
ConocoPhillips structures its upstream operations into six geographic segments: Lower 48, Alaska, Canada, Europe, Middle East and North Africa (EMENA), Asia Pacific, and Other International, with production spanning 13 countries as of 2024.[2] The company produced approximately 1.9 million barrels of oil equivalent per day (BOE/d) globally in 2024, with the U.S. accounting for over 60% of output, driven by unconventional resources.[5] In the U.S. Lower 48 states, ConocoPhillips maintains its largest production base, emphasizing unconventional plays in the Permian Basin's Delaware and Midland sub-basins in Texas and New Mexico, the Eagle Ford Shale in South Texas, and the Bakken Formation in North Dakota. These assets yielded about 800,000 BOE/d in 2024, supported by extensive horizontal drilling and hydraulic fracturing efficiencies that have lowered breakeven costs to under $40 per barrel in core areas.[44] The Permian holdings, expanded through acquisitions like Concho Resources in 2021, encompass over 2.5 million net acres with multi-zone potential.[45] Alaska operations center on the North Slope, where ConocoPhillips operates as the state's leading crude producer, with major assets including the Prudhoe Bay Unit (26% working interest, the largest oil field in North America, discovered in 1968), Kuparuk River Unit (owner and operator), and the Western North Slope developments like Greater Kuparuk and Meltwater. These fields produced around 200,000 barrels of oil per day in 2024, bolstered by infrastructure such as the Trans-Alaska Pipeline System, though output faces natural decline offset by infill drilling and waterflooding.[46] Ongoing projects include the Nuna Hope gas development and Willow, a $8 billion investment approved in 2023 for 180,000 barrels per day peak production starting in 2029.[47] Canadian activities primarily involve oil sands mining and in-situ extraction in Alberta's Athabasca region, notably the Surmont project (50% interest with TotalEnergies, producing via steam-assisted gravity drainage), alongside unconventional gas and liquids in British Columbia's Montney play. The segment contributed about 150,000 BOE/d in 2024, with focus on low-emission steam generation and carbon capture integration to extend reserves estimated at over 4 billion BOE.[2] The EMENA segment features mature North Sea production in Norway (operator of 15 fields, including Ekofisk, discovered 1969, with extensions approved through 2040s yielding 400,000 BOE/d) and the UK, plus offshore assets in Libya's Waha concessions (blocked by political instability since 2011 but partially resumed) and non-operated LNG in Qatar's Qatargas 3 (30% interest, 7.8 million tonnes per annum capacity). The 2024 Marathon Oil acquisition added a 10.5% stake in Equatorial Guinea's LNG facility, enhancing global LNG portfolio to over 10 million tonnes per annum net capacity.[48] Asia Pacific operations include the operated Australia Pacific LNG (APLNG) project on Queensland's Curtis Island (37.5% interest, integrating coal seam gas to 7.6 million tonnes per annum LNG exports via long-term contracts with Sinopec and Kansai Electric), with upstream Arrow Energy gas fields supplying 1,000 trillion cubic feet reserves. Additional assets span Indonesia's Kualakurun and South Sumatra blocks, Malaysia's Gumusut-Kakap deepwater field, and exploration in China and Timor-Leste, collectively producing around 200,000 BOE/d focused on gas monetization.[2] Other International covers minor interests in Colombia and legacy positions.[5]Corporate Governance
Executive Leadership
Ryan M. Lance has served as chairman and chief executive officer of ConocoPhillips since May 2012, overseeing the company's strategy in exploration and production with an emphasis on organic growth, financial returns, and shareholder yield.[49] Prior to this, Lance held senior roles including senior vice president of exploration and production, contributing to operational expansions in key basins.[50] The executive leadership team reports to Lance and manages core functions across operations, finance, and support areas. Andy O'Brien was appointed chief financial officer and executive vice president of strategy and commercial effective June 1, 2025, succeeding W.L. "Bill" Bullock who retired after 39 years; O'Brien oversees finance, corporate planning, business development, commercial activities, sustainable development, and low-carbon technology initiatives.[51] [52] Other key executives include Kirk Johnson, executive vice president of global operations and technical functions, responsible for operations in regions such as Alaska, Asia Pacific, Canada, Europe, and the Middle East, as well as technical support; Nick Olds, executive vice president of Lower 48 operations and global health, safety, and environment (HSE); Heather Hrap, senior vice president of human resources and real estate/facilities services; Kelly Rose, senior vice president of legal and general counsel, handling legal oversight, communications, and corporate events; and Andrew Lundquist, senior vice president of government affairs, addressing global public policy issues.[53] No further changes to the executive leadership team were reported amid 2025 workforce reductions.[54]| Executive | Title | Key Responsibilities |
|---|---|---|
| Ryan Lance | Chairman and CEO | Overall strategy, growth, and returns[53] |
| Andy O'Brien | CFO and EVP, Strategy and Commercial | Finance, planning, development, sustainability[51] |
| Kirk Johnson | EVP, Global Operations and Technical Functions | International operations and technical support[53] |
| Nick Olds | EVP, Lower 48 and Global HSE | U.S. onshore operations and safety[53] |
| Heather Hrap | SVP, Human Resources and Real Estate | HR and facilities management[53] |
| Kelly Rose | SVP, Legal and General Counsel | Legal, communications, events[53] |
| Andrew Lundquist | SVP, Government Affairs | Policy and regulatory engagement[53] |
Board of Directors and Oversight
The Board of Directors of ConocoPhillips consists of 13 members, 11 of whom qualify as independent under New York Stock Exchange standards.[55][56] Ryan M. Lance has served as Chairman and Chief Executive Officer since April 2012, while Robert A. Niblock holds the position of Lead Independent Director since February 2010.[56] The board's composition emphasizes expertise in energy, finance, operations, and strategy, with recent additions including Kathleen A. McGinty in July 2025, bringing sustainability and policy experience from Johnson Controls, and Nelda J. Connors in September 2024, adding leadership from industrial holdings.[56][55] Board oversight encompasses strategic planning, enterprise risk management, financial integrity, executive compensation, and sustainability integration into operations.[57] The Committee on Directors’ Affairs, chaired by Niblock, evaluates board size, composition, and succession; nominates director candidates; and reviews governance guidelines, which mandate a substantial majority of independent directors and annual self-evaluations for all committees except the Executive Committee.[58][59] Specialized oversight occurs through five standing committees:| Committee | Chair | Key Oversight Responsibilities |
|---|---|---|
| Executive Committee | Ryan M. Lance | Acts on behalf of the full board between meetings on delegated matters.[60] |
| Audit and Finance Committee | Arjun N. Murti | Supervises financial reporting, internal audits, compliance, and risk assessment.[60] |
| Human Resources and Compensation Committee | Jeffrey A. Joerres | Oversees compensation policies, executive performance, and talent development.[60] |
| Committee on Directors’ Affairs | Robert A. Niblock | Manages director nominations, board evaluations, and corporate governance.[60] |
| Public Policy and Sustainability Committee | David T. Seaton | Reviews public policy issues, sustainability strategies, and environmental risks.[60][57] |
Financial Performance
Revenue, Earnings, and Growth Metrics
ConocoPhillips' financial performance, as an exploration and production company, is highly sensitive to commodity price cycles, with revenue and earnings expanding rapidly during periods of elevated oil and gas prices and contracting amid downturns. For instance, the sharp revenue increase from 2020 to 2022 reflected surging global energy demand recovery post-COVID-19 and geopolitical disruptions, while subsequent declines in 2023 and 2024 aligned with moderated prices and normalized supply dynamics.[62][63] The company's net earnings followed a similar trajectory, posting a loss in 2020 due to low prices and pandemic-induced demand collapse, before rebounding to record highs in 2022 driven by Brent crude averaging over $100 per barrel. Earnings moderated in 2023 and 2024 as prices stabilized around $80 per barrel, though profitability remained robust relative to pre-2020 levels, supported by cost discipline and high-margin assets in regions like the Permian Basin.[62][64]| Year | Revenue (USD billions) | Net Earnings (USD billions) | Revenue YoY Growth (%) |
|---|---|---|---|
| 2020 | 18.8 | -2.7 | -42.3 |
| 2021 | 46.0 | 8.1 | 144.7 |
| 2022 | 78.6 | 18.7 | 70.6 |
| 2023 | 58.6 | 11.0 | -25.4 |
| 2024 | 57.0 | 9.2 | -2.7 |