Profile: ConocoPhillips (COP)

ConocoPhillips (ConocoPhillips), incorporated on November 16, 2001, is an international, integrated energy company. The Company’s business is organized into six segments. Exploration and Production (E&P) segment explores for, produces and markets crude oil, natural gas and natural gas liquids. Midstream segment gathers, processes and markets natural gas produced by ConocoPhillips and others, and fractionates and markets natural gas liquids. Midstream segment consists of its 50% equity investment in DCP Midstream, LLC. Refining and Marketing (R&M) segment purchases, refines, markets and transports crude oil and petroleum products. LUKOIL Investment segment consists of its equity investment in the ordinary shares of OAO LUKOIL. Chemicals segment manufactures and markets petrochemicals and plastics and consists of its 50% equity investment in Chevron Phillips Chemical Company LLC (CPChem). Emerging Businesses segment includes the Company’s investment in new technologies or businesses outside its scope of operations.

Exploration and Production

The E&P segment explores for, produces and markets crude oil, natural gas and natural gas liquids on a worldwide basis. It also mines deposits of oil sands in Canada to extract the bitumen and upgrade it into a synthetic crude oil. Operations to liquefy and transport natural gas are also included in the E&P segment. At December 31, 2008, E&P operations were producing in the United States, Norway, the United Kingdom, the Netherlands, Canada, Nigeria, Ecuador, Argentina, offshore Timor-Leste in the Timor Sea, China, Indonesia, Algeria, Libya, Vietnam and Russia.

During the year ended December 31, 2008, E&P’s worldwide production, including its share of equity affiliates’ production other than LUKOIL, averaged 1,767,000 barrels of oil equivalent per day (BOED). During 2008, 775,000 BOED were produced in the United States. Production from the Company’s international E&P operations averaged 992,000 BOED in 2008. In addition, its Canadian Syncrude mining operations had net production of 22,000 barrels per day in 2008. In 2008, United States E&P operations contributed 44% of E&P’s worldwide liquids production and 43% of natural gas production. ConocoPhillips has a 36.1% non-operator interest in all fields within the Greater Prudhoe Area. Its net crude oil production from the Great Prudhoe Bay field averaged 106,000 barrels per day, while natural gas liquids production averaged 17,000 barrels per day in 2008.

ConocoPhillips operates the Greater Kuparuk Area, which consists of the Kuparuk field and four satellite fields: Tarn, Tabasco, Meltwater, and West Sak. Net oil production from the area averaged 67,000 barrels per day in 2008. The Alpine field and its satellite fields, located west of the Kuparuk field, produced at a net rate of 70,000 barrels of oil per day in 2008. The Company’s assets include the North Cook Inlet field, the Beluga River field and the Kenai LNG facility, all of which it operates. Net production in 2008, from the Cook Inlet Area averaged 88 million cubic feet per day of natural gas.

At December 31, 2008, the Company’s portfolio of producing properties in the Gulf of Mexico included one operated field and three fields operated by its co-venturers. The Company operates and holds a 75% interest in the Magnolia field in Garden Banks Blocks 783 and 784. It holds a 16% non-operator interest in the unitized Ursa field located in the Mississippi Canyon area. It also owns a 16% interest in the Princess field, a northern, subsalt extension of the Ursa field. The Company also holds 12.4% non-operator interest in the unitized K2 field, which comprises seven blocks in the Green Canyon area.

In 2008, E&P operations in Europe contributed 24% of E&P’s worldwide liquids production. Europe operations contributed 20% of natural gas production in 2008. The Company’s European assets are principally located in the Norwegian and United Kingdom sectors of the North Sea. The Greater Ekofisk Area comprises four producing fields: Ekofisk, Eldfisk, Embla and Tor. Net production in 2008 from the Greater Ekofisk Area was 99,000 barrels of liquids per day and 100 million cubic feet of natural gas per day. The Company also has ownership interests in other producing fields in the Norwegian sector of the North Sea and Norwegian Sea, including a 24.3% interest in the Heidrun field, a 20% interest in the Alvheim field, a 10.3% interest in the Statfjord field, a 23.3% interest in the Huldra field, a 1.6% interest in the Troll field, a 9.1% interest in the Visund field, a 6.4% interest in the Grane field and a 2.4% interest in the Oseberg area. Its net production from these and other fields in the Norwegian sector of the North Sea and the Norwegian Sea averaged 68,000 barrels of liquids per day and 139 million cubic feet of natural gas per day in 2008.

The Company has a 58.7% interest in the Britannia natural gas and condensate field, and owns 50% of Britannia Operator Limited, the operator of the field. It operates and holds a 36.5% interest in the Judy/Joanne fields, which together comprise J-Block. It also has various ownership interests in 18 producing gas fields in the Rotliegendes and Carboniferous areas of the southern North Sea. ConocoPhillips also has ownership interests in several other producing fields in the United Kingdom sector of the North Sea, including 23.4% interest in the Alba field, 40% interest in the MacCulloch field and 4.8% interest in the Statfjord field.

In 2008, E&P operations in Canada contributed 8% of E&P’s worldwide liquids production (excluding Syncrude production). Canadian operations contributed 22% of E&P’s worldwide natural gas production in 2008. In 2008, E&P operations in South America contributed 1% of E&P’s worldwide liquids production. It also has interests in Ecuador and Peru. The Company sold its assets in Argentina in September 2008. In Ecuador, it holds a 42.5% interest in Block 7 and a 46.25% interest in Block 21. Net production in 2008 averaged 9,000 barrels of crude oil per day.

In 2008, E&P operations in the Asia Pacific area contributed 11% of E&P’s worldwide liquids production and 13% of natural gas production. It operates seven production sharing contracts (PSCs) in Indonesia. ConocoPhillips’ assets are concentrated in two core areas: the West Natuna Sea and onshore South Sumatra. It operates three offshore PSCs: South Natuna Sea Block B, Amborip VI, Kuma and Arafura Sea. The Xijiang development consists of two fields located approximately 80 miles south of Hong Kong in the South China Sea. Its combined net production of crude oil from the Xijiang fields averaged 7,000 barrels per day in 2008.

The Company’s ownership interest in Vietnam is centered around the Cuu Long Basin in the South China Sea, and consists of two primarily oil producing blocks, four exploration blocks, and one gas pipeline transportation system. It has a 23.3% interest in Block 15-1 in the Cuu Long Basin. Net production in 2008, was 13,000 barrels of oil per day. It also has a 36% interest in the Rang Dong field in Block 15-2 in the Cuu Long Basin. It operates and holds a 57.2 ownership interest in the Bayu-Undan field located in the Timor Sea. It also has a 30% interest in the Greater Sunrise gas and condensate field located in the Timor Sea. In 2008, E&P operations in the Middle East and Africa contributed 8% of E&P’s worldwide liquids production and 2% of natural gas production.

The Company has interests in three fields in Block 405a: Menzel Lejmat North field, the Ourhoud field, and the development stage El Merk (EMK) oil field unit. Net production from these fields averaged 13,000 barrels of crude oil per day in 2008. ConocoPhillips holds a 16.33% interest in the Waha concessions in Libya. In 2008, the Company was producing from four onshore Oil Mining Leases (OMLs), in which it has a 20% non-operator interest. Its net production from these leases was 21,000 barrels of liquids per day and 105 million cubic feet of natural gas per day in 2008. The Company has a 50% equity ownership interest in Polar Lights Company. Its net production from Polar Lights averaged 11,000 barrels of oil per day in 2008. In the Caspian Sea, the Company has interest in the Republic of Kazakhstan’s North Caspian Sea Production Sharing Agreement (NCSPSA), which includes the Kashagan field.

Midstream

The Company’s Midstream business purchases raw natural gas from producers and gathers natural gas through pipeline gathering systems. The gathered natural gas is then processed to extract natural gas liquids. The remaining residue gas is marketed to electrical utilities, industrial users, and gas marketing companies. Most of the natural gas liquids are fractionated, separated into individual components like ethane, butane and propane, and marketed as chemical feedstock, fuel or blendstock. Total natural gas liquids extracted in 2008, including its share of DCP Midstream, was 188,000 barrels per day.

DCP Midstream markets a portion of its natural gas liquids to ConocoPhillips and Chevron Phillips Chemical Company LLC under a supply agreement that continues until December 31, 2014. This purchase commitment is on an if-produced, will-purchase basis. At December 31, 2008, DCP Midstream owned or operated 53 natural gas liquids extraction plants, 10 natural gas liquids fractionation plants, and its gathering and transmission systems included approximately 60,000 miles of pipeline. In 2008, DCP Midstream’s raw natural gas throughput averaged 6.2 billion cubic feet per day, and natural gas liquids extraction averaged 360,000 barrels per day. DCP Midstream’s assets are primarily located in producing regions, such as Rocky Mountains, Midcontinent, Permian, East Texas/North Louisiana, South Texas, Central Texas and the Gulf Coast.

At December 31, 2008, outside of DCP Midstream, the Company’s United States natural gas liquids business included a 25,000-barrel-per-day capacity natural gas liquids fractionation plant in Gallup, New Mexico; a 22.5% equity interest in Gulf Coast Fractionators, which owns a natural gas liquids fractionation plant in Mont Belvieu, Texas; a 40% interest in a fractionation plant in Conway, Kansas, and a 12.5% equity interest in a fractionation plant in Mont Belvieu, Texas. It also owns a 39% equity interest in Phoenix Park Gas Processors Limited (Phoenix Park), a joint venture primarily with the National Gas Company of Trinidad and Tobago Limited. Phoenix Park processes gas in Trinidad and markets natural gas liquids throughout the Caribbean and into the United States Gulf Coast. Its facilities include a 1.35-billion-cubic-feet-per-day gas processing plant and a 70,000-barrels-per-day natural gas liquids fractionator. Its share of natural gas liquids extracted averaged 8,000 barrels per day in 2008. Its share of fractionated liquids averaged 14,000 barrels per day in 2008.

Refining and Marketing

R&M operations encompass refining crude oil and other feedstocks into petroleum products (such as gasoline, distillates and aviation fuels); buying, selling and transporting crude oil, and buying, transporting, distributing and marketing petroleum products. In the United States, as of December 31, 2008, R&M markets gasoline, diesel fuel and aviation fuel through approximately 8,340 outlets in 49 states. The majority of these sites utilize the Conoco, Phillips 66 or 76 brands. In its wholesale operations, the Company utilizes a network of marketers and dealers operating approximately 7,270 outlets. Its refined products are marketed on both a branded and unbranded basis. In addition to automotive gasoline and diesel fuel, ConocoPhillips produces and markets aviation gasoline, which is used by smaller, piston-engine aircraft.

At December 31, 2008, ConocoPhillips, in its retail operations, consisted of approximately 330 owned and operated sites under the Conoco, Phillips 66 and 76 brands. Company-operated retail operations are focused in 10 states, mainly in the Midcontinent, Rocky Mountain and West Coast regions. Most of these outlets market merchandise through the Kicks or Circle K brand convenience stores. At December 31, 2008, CFJ Properties, the Company’s 50/50 joint venture with Flying J, owned and operated 110 truck travel plazas that carry the Conoco, Flying J brands or both brands.

The Company manufactures and sells a variety of specialty products, including petroleum cokes, lubes (such as automotive and industrial lubricants), solvents and pipeline flow improvers. Its lubes are marketed under the Phillips 66, Conoco, 76 and Kendall brands. The Company’s 50%-owned Excel Paralubes joint venture owns a hydrocracked lubricant base oil manufacturing plant located adjacent to the Lake Charles refinery. In January 2008, it sold its 50% interest in Penreco, which manufactured and marketed highly refined specialty petroleum products.

LUKOIL Investment

At December 31, 2008, the Company had a 20% ownership in LUKOIL. As reported in LUKOIL’s 2007 annual report, the majority of its 2007 upstream oil production was sourced within Russia, with 62% from the western Siberia region, 15% from the Timan-Pechora province and 12% from the Urals region. Outside of Russia, LUKOIL had oil production in 2007 in Kazakhstan, Egypt, and Azerbaijan, and gas production in Uzbekistan. Eighty-eight percent of LUKOIL’s natural gas production was sourced within Russia. In addition, LUKOIL has an active exploration program focused in Russia, but also encompassing several other international countries. Downstream, LUKOIL has seven refineries with a net crude oil throughput capacity of approximately 1.2 million barrels per day. LUKOIL has a marketing network of 24 countries, with the majority of wholesale and retail sales in Russia, the United States and Europe.

Chemicals

The Chemicals segment consists of the Company’s 50% equity investment in Chevron Phillips Chemical Company LLC (CPChem), a joint venture with Chevron Corporation. CPChem’s business is structured around two primary operating segments: Olefins & Polyolefins, and Specialties, Aromatics & Styrenics. The Olefins & Polyolefins segment produces and markets ethylene, propylene, and other olefin products, which are primarily consumed within CPChem for the production of polyethylene, normal alpha olefins, polypropylene, and polyethylene pipe. The Specialties, Aromatics & Styrenics segment manufactures and markets aromatics products, such as benzene, styrene, paraxylene and cyclohexane.

Emerging Businesses

Emerging Businesses encompass the development of new technologies and businesses outside the Company’s normal scope of operations. Activities within this segment are focused on power generation and innovation of new technologies, such as those related to conventional and nonconventional hydrocarbon recovery (including heavy oil), refining, alternative energy, biofuels and the environment. The focus of its power business is on developing integrated projects to support the Company’s E&P and R&M strategies. The Immingham combined heat and power (CHP) plant, a wholly owned 730-megawatt, gas-fired facility in United Kingdom, provides steam and electricity to the Humber refinery and steam to a neighboring refinery, as well as merchant power into the United Kingdom market. The Company also owns a gas-fired cogeneration plant in Orange, Texas. The Company offers a gasification technology (E-Gas) that uses petroleum coke, coal, and other low-value hydrocarbons as feedstock, resulting in high-value synthetic gas used for a slate of products, including power, hydrogen and chemicals.