News – full story
Split follows identical moves at ConocoPhillips and Marathon
17/10/2012
Murphy Oil to spin-off US downstream assets
Repeats plan to sell UK’s Milford Haven refinery
Adam Duckett
MURPHY OIL’S board has approved plans to spin off its downstream assets in the US as it repeats industry trends of isolating its more profitable oil production activities.
The new downstream company, called Murphy USA, will include two ethanol production facilities in North Dakota and Texas, seven distribution terminals and more than 1,100 petrol stations.
The company originally announced it would exit refining in 2010, and completed the sale of its two US refineries in Louisiana and Wisconsin last year. Announcing the spin-off yesterday, Murphy Oil reaffirmed its plans to divest its UK downstream assets, which includes the Milford Haven refinery in Wales.
Murphy’s upstream business will become an independent exploration and production business, continuing its activities in Canada, Malaysia and the US. A number of integrated oil companies have chosen to divest their low-margin downstream operations to focus on high-margin production. ConocoPhillips divested its refining business, Phillips66, earlier this year following on from Marathon’s split in 2011.
“Separating these two businesses will allow each to unlock its own potential for growth. We have built two strong but distinct businesses,” says Murphy chairman Claiborne Deming.
Murphy expects its spin-off will be completed next year, following regulatory approval.
