Conoco, Phillips eye RMT venture

May 20, 1996

U.S. Refineries [15803 bytes] Conoco Inc. and Phillips Petroleum Co. last week disclosed a move toward combining their U.S. refining, marketing, and transportation (RMT) operations in a joint venture. Present talks could result in a letter of intent for the 50-50 venture. But negotiations are preliminary, and "significant issues" must be resolved before either company is willing to sign such a letter.

U.S. Refineries [15803 bytes]

Conoco Inc. and Phillips Petroleum Co. last week disclosed a move toward combining their U.S. refining, marketing, and transportation (RMT) operations in a joint venture.

Present talks could result in a letter of intent for the 50-50 venture. But negotiations are preliminary, and "significant issues" must be resolved before either company is willing to sign such a letter.

If the companies choose to proceed with the plan, combined refining capacity could amount to nearly 770,000 b/cd of crude oil, assuming commitment of each company's total capacity. In that event, the joint venture's capacity would rank No. 6 among U.S. refiners (see table, OGJ, Dec. 18, 1995, p. 41).

The new venture would sell gasoline and other petroleum products under the Conoco and Phillips 66 brands at more than 12,000 retail outlets-5,125 for Conoco and 7,200 for Phillips. Transportation assets include river barges, tank trucks, terminals, crude and products pipelines, and ocean going tankers.

Other than announcing the (RMT) talks, the companies would say only that the joint venture would be created only if they agreed it would:

Improve their respective financial performances.
Enhance long term viability of each company's U.S. downstream business in the U.S. market.
Provide customers greater convenience and flexibility.
Ensure high quality service.