john lowe executive vice president, planning & strategic transactions meet alaska conference...
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John LoweExecutive Vice President, Planning & Strategic Transactions
John LoweExecutive Vice President, Planning & Strategic TransactionsMeet Alaska Conference
January 24, 2003
Meet Alaska Conference
January 24, 2003
A New Integrated Major
2000 2001 2002
DEFSDEFS
ARCO AlaskaARCO Alaska
CPChem JVCPChem JV
Gulf CanadaGulf Canada
TOSCOTOSCO
Who We Are
• 58,000 employees and $77 billion of assets
• Diversified portfolio of legacy E&P assets based predominately in OECD nations
• Large presence in U.S. refining and marketing
• Joint Ventures in worldwide chemicals and North America midstream
• A- Credit Rating
• 58,000 employees and $77 billion of assets
• Diversified portfolio of legacy E&P assets based predominately in OECD nations
• Large presence in U.S. refining and marketing
• Joint Ventures in worldwide chemicals and North America midstream
• A- Credit Rating
What Do We Want To Look Like
• Increased portfolio of E&P legacy assets with improved returns
• Rationalized RM&T with higher returns
• Lower cost structure
• Reduced debt
• Increased portfolio of E&P legacy assets with improved returns
• Rationalized RM&T with higher returns
• Lower cost structure
• Reduced debt
Higher overall company ROCE
Strategic Objectives
100% replacement plus100% replacement plusReservesReserves
65% of portfolio65% of portfolioUpstream assetsUpstream assets
+$1.25 billion/yr+$1.25 billion/yrSynergiesSynergies
Low 30%Low 30%Debt ratioDebt ratio
12-14%12-14%Mid-cycle* ROCEMid-cycle* ROCE
TargetTarget
*Normalized assumptions: $20 WTI, $3.25 HH, $3.25 GC Crack
Upstream Strategy
•Rationalize & high-grade portfolio
•Build new legacy positions through focused BD and
exploration
•Profitably grow production and reserves
•Increase ROCE
•Rationalize & high-grade portfolio
•Build new legacy positions through focused BD and
exploration
•Profitably grow production and reserves
•Increase ROCE
Portfolio Management
ModeratePerformingBusinesses
HighPerformingBusinesses
LowerPerformingBusinesses
MajorProject
Investments
DisposeDispose
ImproveImprove
Performance Criteria• High returns• Strategic fit• Growth potential
Performance Criteria• High returns• Strategic fit• Growth potential
Upstream Today
Operating in 15 countries
Exploring in 12 others
Legacy Positions
• Production 1.6 MMBOED• Production 65% Oil, 35% Gas• Reserves 8.7 BBOE *• U.S. reserves 42%, International 58%
Year-end 2001 Pro Forma * Includes proven Canadian Syncrude reserves of 280 MMBOE
AlaskaAlaska
0.00.20.40.6
0.81.01.21.4
2003 2004 2005 2006
0.00.20.40.6
0.81.01.21.4
2003 2004 2005 2006
ProductionProduction
MM
BO
ED
MM
BO
ED UK / NorwayUK / Norway
Lower 48Lower 48
CanadaCanada
AlaskaAlaska
North America And Europe Legacy Businesses
Strong foundation for worldwide growth
CanadaCanada
Lower 48Lower 48
EuropeEurope
Production Growth
0.00.20.40.60.81.01.21.41.61.8
2002* 2003 2004 2005 2006
MM
BO
ED
0
100
200
300
400
500
600
MM
BO
E
NorthAmerica
Europe
Rest ofWorld
CAGR 3%
* Adjusted for dispositions
Exploration Focus
UK / Norway UK / Norway
NW North America
West AfricaWest AfricaVenezuelaVenezuela
Gulf of Mexico Gulf of Mexico
Asia Pacific
Asia Pacific
Caspian Caspian
• Concentrating in 7 areas• Rationalizing portfolio• Further improve positioning
New venture option
Downstream Strategy•Operating reliability with
low cost structure
•Rationalize assets
•Superior execution of clean fuels projects
•Capitalize on proprietary technology positions
•Improve ROCE
•Operating reliability with low cost structure
•Rationalize assets
•Superior execution of clean fuels projects
•Capitalize on proprietary technology positions
•Improve ROCE
Global Downstream Portfolio
17000 branded outlets
$10.0 B capital employed
12 refineries – 2166 MBD
United States
2900 outlets in 17 countries
$1.5 B capital employed
6 refineries – 440 MBD
International
CommercialStrategy
• Maximize value through supply chain
• Add value through trading around assets
• Disciplined processes
• Maximize value through supply chain
• Add value through trading around assets
• Disciplined processes
Commercial Business Scope
HoustonHouston
LondonLondon
SingaporeSingapore
Calgary Calgary
Equity Liquids Production 1.0 MMBD
Equity Gas Production 3.5 BCFD
Crude Processed 2.5 MMBD
Light Oils Marketed 2.4 MMBD
NGL’s Marketed 0.5 MMBD
Employees 550
The great scale of our Upstream and Downstream operations creates significant commercial opportunities
The great scale of our Upstream and Downstream operations creates significant commercial opportunities
Our Strategy
• Enhance profitability and returns
– Cost discipline / synergy capture
– Capital discipline and portfolio rationalization
• Reduce debt
• Strengthen portfolio of upstream growth opportunities
• Significantly improve downstream returns
• Enhance profitability and returns
– Cost discipline / synergy capture
– Capital discipline and portfolio rationalization
• Reduce debt
• Strengthen portfolio of upstream growth opportunities
• Significantly improve downstream returns
The presentation at this meeting contained forward-looking statements about ConocoPhillips’ consolidated business and the following operating groups: petroleum exploration and production; natural gas gathering, processing and marketing; petroleum refining, marketing and transportation; and chemical and plastics manufacturing. Where, in any forward-looking statement, the company expressed an expectation or belief as to future results, such expectation or belief was expressed in good faith and believed to have a reasonable basis. However, there can be no assurance that the statement of expectation or belief will result or be achieved. The actual results may be affected by a variety of risks which could cause the stated expectation or belief to differ materially.
The important risk factors, but not necessarily all such factors that may cause expectations or results to differ, are set forth in ConocoPhillips’ reports filed with the U.S. Securities Exchange Commission.
Cautionary Statement for the Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995
Cautionary Statement for the Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995
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