Anchorage Daily News

Federal regulators on Friday approved a merger of Conoco Inc. and Phillips Petroleum Co., and within hours the two companies sealed the deal under the new name ConocoPhillips.

With $75 billion in assets, it's the world's sixth-largest publicly held energy company in terms of oil and gas reserves and production.

It marks the second identity change in less than three years for employees at Phillips, Alaska's top oil and gas producer, and a return to the state for Conoco, which pulled out in 1993.

The new company will be based in Houston, Texas, where Conoco was based, with the Phillips headquarters at Bartlesville, Okla., to become a "global support center."

The Federal Trade Commission, in unanimously approving the $15.1 billion merger, required the new company to sell off some assets for antitrust reasons, including a Phillips refinery in Utah and a Conoco refinery in Colorado, but no Alaska assets were involved.

Executives for the new company said it would shed some of its nearly 56,000 employees as the two companies eliminate some job overlap. In Alaska, previously announced plans to trim 60 jobs, or about 6 percent of the 950-person Phillips work force, are still on, said Jim Mulva, formerly chairman of Phillips who is now president and chief executive of ConocoPhillips.

Mulva and board chairman Archie Dunham said the new company would have the muscle to hunt and develop oil and gas projects worldwide, including in the Middle East. ConocoPhillips has operations in 49 countries and proved reserves of 8.7 billion barrels of oil equivalent.

Alaska, however, will remain an important part of the business, the executives said, suggesting their company might be in a stronger position to fulfill Alaska's long-held dream of a long pipeline to carry the North Slope's huge natural gas stores to Lower 48 markets.

"We're uniquely positioned to make that happen," Dunham said. Phillips had a major Alaska presence, he said, while Conoco had interests in western Canada, where another large storehouse of gas resides in the ground at the Mackenzie River delta.

Alaska and its Canadian neighbors have been debating for months a variety of proposed pipeline projects that could connect one or both of the gas fields to markets. Generally, Phillips favored a line down the Alaska Highway and then across Canada toward Chicago, while others want a line from Prudhoe Bay east to Mackenzie and then south.

Regardless of route, Dunham sounded optimistic a project can happen.

"We believe the U.S. market desperately needs natural gas," he said.

Both Conoco and Phillips have big strings of retail gas stations, though none in Alaska. The new company will continue to sell gas under established brand names including Conoco, Phillips 66, Jet, Circle K and 76. Phillips had about 9 percent of U.S. gasoline sales, while Conoco had 3 percent.

In Alaska, about 60 Phillips Alaska Inc. employees are expected to be either transferred out of state or offered severance pay to leave the company. Most of those employees perform "shared services" such as accounting and computer support for Phillips, its tanker company and other subsidiaries.

All employees will know their status within 45 days of the FTC merger approval, company spokespersons in Anchorage have said.

Phillips, in joining with Conoco, is now part of a much larger company. Last November when the merger was announced, Conoco had daily production of 880,000 barrels of oil equivalent, while Phillips had 820,000, about half pumped from Alaska.

The merger could dilute Alaska's influence within the company, which will be looking for giant new fields that aren't likely to be found in Alaska outside of closed areas like the Arctic National Wildlife Refuge, said oil industry consultant Ken Boyd.

"The bigger the company, the bigger the opportunities they need," he said. More and more, Alaska will be of interest mainly to smaller, so-called independent oil companies willing to work harder to develop small oil and gas fields, he said.

Boyd, a former director of the state Division of Oil and Gas, works for one of these, EnCana, which in November will begin drilling the offshore McCovey project near Prudhoe Bay. EnCana took over as operator of that field from Phillips, which remains a partner, Boyd said.

"I'm hopeful that the merger does something that's good, but quite frankly, the future of Alaska is going to be these larger independents who come in when the big boys leave," he said.

Phillips, which took over Arco Alaska in 2000, had stakes in almost every North Slope oil field, ran the Kuparuk and Alpine fields and owned 27 percent of the trans-Alaska pipeline. Phillips also has been the most active explorer in the state's newest oil frontier, the National Petroleum Reserve-Alaska.

Conoco ran the Slope's Milne Point field until 1993, when it swapped the field for BP properties in the Gulf of Mexico.

The Phillips and Conoco marriage is the latest in a recent wave of oil mergers that include Chevron and Texaco, Exxon and Mobil, and BP's takeovers of Amoco and Atlantic Richfield.

Reporter Wesley Loy can be reached at wloy@adn.com or 907-257-4590.