Conoco and Phillips eye merger

09 November 2001

US oil companies Conocoand Phillips Petroleum Corporationannounced on 18 November their intention to merge, creating new opportunities for both companies in the Middle East. If successful, the merger will allow the new company to join the US' ExxonMobil Corporationand the Royal Dutch/Shell Groupin working on two of the core ventures in the Saudi gas initiative.

The merger will make the new company, to be called ConocoPhillips, the sixth-largest energy company in the world on the basis of hydrocarbons reserves. It is expected to have an enterprise value of $53,500 million and to make cost savings of about $750 million a year through the merger.

Conoco has a strong Middle East presence. Upstream, it has interests in Syria and Dubai as well as involvement in Project Kuwait and Core Venture 3 of the Saudi gas initiative. It has also been active in Iran and Libya. Downstream, it is targeting a role in the Dolphin gas project. Phillips' interests in the Middle East are mainly downstream and include a presence in Qatar's petrochemical development. It is also a participant in the gas initiative, working on Core Venture 1 under the leadership of ExxonMobil.

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