HOUSTON ― Integrated oil major ConocoPhillips named two company insiders on Friday to head its oil and gas production and refining units, whose separation is expected to be completed in the second quarter of next year.
Houston-based ConocoPhillips said in July it would spin off its refining arm from its exploration and production operations, abandoning an integrated model for two companies whose sole focuses will be on their own specific businesses.
Ryan Lance, 49, senior vice president of ConocoPhillips’s international exploration and production business since May 2009, will become chairman and chief executive of the upstream company, which will keep the name ConocoPhillips and be headquartered in Houston.Greg Garland, 53, former president and CEO of joint-venture Chevron Philips Chemical Co who has run ConocoPhillips’ exploration and production business in the Americas for a year, will be the chairman and chief executive of the refining, chemical and pipeline company.
ConocoPhillips has yet to announce a name for the downstream company or its headquarters location.
ConocoPhillips Chief Executive Jim Mulva, 65, will retire when the split is complete.
The appointments surprised some analysts, who had expected former Exxon Mobil Corp exploration executive Alan Hirshberg to run the upstream company and Willie Chiang, current head of the refining arm, to run that company.
ConocoPhillips brought in Garland to oversee exploration and production and Hirshberg to head planning and strategy a year ago in a management shake-up that included the retirement of former Chief Operating Officer John Carrig, who had been seen as Mulva’s successor.
ConocoPhillips spokesman John Roper said Chiang would continue as senior vice president of refining, marketing, transportation and commercial in the downstream company, while Hirshberg would remain senior vice president of planning and strategy in the upstream company.
Deutsche Bank analyst Paul Sankey said in a note that Hirshberg is likely “locked up” at the company, “but we believe that Chiang sees himself as a future CEO, and he would have to find that role in a different company.”
Brian Youngberg, an analyst with Edward Jones, said Lance’s background as a petroleum engineer puts a leader in operations at the top, rather than a leader from a finance and treasury background like Mulva.
And Garland’s experience running the chemical company as well as a long tenure as a project engineer at Phillips Petroleum brings a wider view including chemicals, the likely growth engine for the downstream company, Youngberg said.
Youngberg said ConocoPhillips will continue to de-emphasize refining over time, so “having someone with a broader background like Garland makes sense.”
Lance has been with ConocoPhillips, predecessor Phillips Petroleum and various divisions of ARCO for 26 years, ConocoPhillips said.
Garland was the president and chief executive of Chevron Phillips, a joint venture of ConocoPhillips and Chevron , from 2008 through 2010. He has been associated with ConocoPhillips, its predecessors and affiliated companies for 31 years, starting as a project engineer with Phillips Petroleum.