The Return of Phillips 66

The spin-off of Phillips 66 by ConocoPhillips is part of a larger trend of big companies morphing into smaller businesses.

June 04, 2012

OKLAHOMA CITY - For 85 years, Phillips 66 signs graced gasoline stations throughout Oklahoma. Then a decade ago, Conoco Inc. and Phillips Petroleum Co. merged into ConocoPhillips, deleting the iconic Phillips 66 brand. But now, Phillips 66 is back on Oklahoma stations after ConocoPhillips jettisoned its refinery and marketing business in May, The Oklahoman reports.

Phillips 66 started removing ConocoPhillips branding from stations across Oklahoma and replacing it with the old Phillips 66 logo. Analysts say the split mirrors a burgeoning trend of large, merged companies breaking back into smaller businesses.

A smaller company can allow more flexibility in terms of testing new technology, and Wall Street appears to prefer them over the larger, more ungainly firms. Last year, Marathon Oil started the whole thing when it made its marketing and refining unit into Marathon Petroleum.

"It€™s about enhanced flexibility €" the ability to focus on an individual asset or set of assets," said Howard Thill, Marathon Oil vice president of investor relations and public affairs, during an April conference.

"When you have a very large conglomerate, it€™s very difficult to be able to generate enough information at a low enough level to give investors that transparency into the business," he said. "Independent refiners and independent exploration and production companies disclose much more information about their companies than a major integrated because from a major integrated standpoint, the scale is so large that it just doesn€™t make a difference in that respect."

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