BP has not ruled out major restructuring along the lines of the recently announced upstream/downstream split of ConocoPhillips, according to a Reuters report.
The supermajor’s CEO Bob Dudley said yesterday that BP will prosper either way once it gets beyond the current difficult transition period caused chiefly by giant liabilities arising from the Gulf of Mexico spill last year.
“We’re not ruling it in or out. What we do often is review our portfolio and consider our options,” Dudley told reporters.
Speculation has grown in recent weeks as to whether BP might consider following ConocoPhillips (COP) in separating its exploration and production, or upstream, and refining and marketing, or downstream, divisions into different businesses.
This speculation has been fuelled by BP’s Q2 results yesterday which undershot analysts’ predictions and led shares down 2%.
Dudley was reportedly non-committal on the Conoco plan, while BP’s top refining executive pointed out the two companies have very different downstream profiles.
Analysts and some shareholders have argued that a major ConocoPhillips-style shakeup would lead to an immediate improvement in the value of BP stocks, which have lost a third of their value since the Deepwater Horizon disaster last year.
Dudley insisted that BP was capable of radical change if needed. Dudley said he was “committed to seeing the true value of the business more strongly reflected in our share price,” but that 2011 was a “year of consolidation,” as BP recovered from the fallout of the Gulf of Mexico oil spill.
But head of refining and marketing Iain Conn made it clear Tuesday that the company still believes refining can be a good business. “If you look at Conoco’s downstream earnings per unit of throughput, its about half ours,” said Conn.
“We’re a very different downstream company, we have a global downstream company unlike Conoco, which is largely a U.S. one, and we have large sources of growth in that downstream company,” said Conn.
