Phillips Petroleum Company

Phillips Petroleum Company was an American integrated energy company established in Bartlesville, Oklahoma, in 1917 by brothers Frank Phillips and L. E. Phillips. It developed from a regional oil and gas producer into a broad-based enterprise involved in exploration and production, natural-gas gathering, crude-oil transportation, refining, fuel marketing, petrochemicals, fertilizers, and polymers. The company’s growth was closely tied to the development of the Mid-Continent and Texas natural-gas fields, particularly the Panhandle and Hugoton fields, and it became one of the largest American producers of natural-gas liquids during the 1920s. Phillips entered refining in 1927 when it opened a facility in Borger, Texas, capable of producing gasoline, kerosene, fuel oils, and other petroleum fractions. That same year it opened its first filling station in Wichita, Kansas. In 1930 the company introduced the Phillips 66 trademark, a name that became one of the best-known gasoline brands in the United States. The brand was associated with the company’s gasoline business, service stations, transportation fuels, and later lubricants and other automotive products. Phillips expanded its retail footprint through acquisitions and rebranding, including the conversion of Tidewater Oil’s West Coast outlets to Phillips 66 locations after acquiring those operations in 1966. The company also became an important technology and chemicals business. During the Second World War, Phillips worked on higher-octane aviation and automotive fuels and developed an industrial hydrofluoric-acid alkylation process in 1940. After the war, its Phillips Chemical subsidiary entered fertilizer production and expanded into petrochemicals and polymers. A large chemical complex on the Houston Ship Channel supported the production of materials such as ammonia, styrene, ethylene, propylene, butadiene, and other chemical intermediates. These activities helped make Phillips more than an upstream oil producer and gave it a significant position across the energy and industrial-materials value chain. Phillips expanded outside the United States during the 1960s, with exploration and production interests in Canada, Venezuela, Colombia, and other regions. Its most important international discovery was the Ekofisk field in the Norwegian sector of the North Sea, where oil and gas were discovered on December 23, 1969. Ekofisk became a major producing field and an important part of Phillips’s international identity. The company’s involvement in the field also exposed it to serious operational and safety risks, including the 1980 capsizing of the Alexander L. Kielland drilling rig, which killed 123 people. The rig was operated by a contractor and chartered by Phillips Norway; ensuing litigation over jurisdiction was ultimately unsuccessful. Phillips continued to expand through acquisitions, including its 1983 purchase of General American Oil Company, an independent producer with domestic and international assets. In the mid-1980s, however, it faced hostile takeover attempts led first by T. Boone Pickens’s Mesa Power and later by Carl Icahn. Although Phillips remained independent, its defensive recapitalization increased its debt burden. The resulting financial pressure contributed to asset sales, restructuring, and a greater strategic emphasis on reducing leverage. The company also combined its worldwide chemicals operations with Chevron’s chemicals business in 2000, forming Chevron Phillips Chemical Company. On August 30, 2002, Phillips Petroleum merged with Conoco Inc. The transaction ended Phillips Petroleum as an independent company and created ConocoPhillips, then one of the largest integrated energy companies in the United States. The Phillips 66 trademark continued within the combined business. In 2012, ConocoPhillips separated its upstream business from its midstream and downstream operations. The downstream company was named Phillips 66, reviving the historic trademark and carrying forward refinery, chemicals, pipeline, and fuel-marketing assets associated with the former Phillips Petroleum and ConocoPhillips businesses. Phillips Petroleum itself therefore survives primarily through successor companies, brands, facilities, and corporate legacies rather than as a standalone corporation.

Phillips Petroleum Company was incorporated on June 13, 1917, in Bartlesville, Oklahoma, by brothers Frank Phillips and L. E. Phillips. It initially operated as an oil and gas company but quickly pursued vertical integration. Its activities came to include exploration and production, natural-gas gathering, pipelines, refining, fuel marketing, and chemicals. The company’s early expansion was strongly connected to natural-gas discoveries in the Panhandle field of Texas and the Hugoton field of Kansas. By 1925 it had become the leading American producer of natural-gas liquids. Phillips opened its first refinery in Borger, Texas, in 1927. The facility produced gasoline and other refined petroleum fractions, allowing the company to move beyond raw-material production. Later that year Phillips opened its first service station in Wichita, Kansas. In 1930 it introduced the Phillips 66 name and trademark. The name became a major consumer-facing gasoline brand and eventually one of the most enduring assets associated with the company. Frank Phillips remained president until 1939 and continued as chairman until 1949. Under subsequent management, Phillips expanded its resource base and infrastructure. In 1942 it acquired substantial acreage in the Hugoton-Panhandle fields and a minority interest in Panhandle Eastern Pipeline Company. A 1954 United States Supreme Court decision involving Phillips Petroleum and the State of Wisconsin held that federal regulation applied to certain wellhead natural-gas prices under the Natural Gas Act. Phillips subsequently divested its Panhandle Eastern interest but retained a significant role as a natural-gas supplier. The Second World War increased demand for aviation gasoline, jet fuel, and other specialized petroleum products. Phillips invested in fuel technology and developed a hydrofluoric-acid alkylation process in 1940 to support production of higher-octane components. In the postwar period it created Phillips Chemical Company, entered the fertilizer business through anhydrous ammonia production, and built a major Houston Ship Channel petrochemical complex. Its chemical activities expanded into industrial intermediates and polymers, creating a second major business alongside petroleum. During the 1960s Phillips internationalized its exploration and production portfolio, with operations and interests in Canada, Venezuela, Colombia, and elsewhere. The company’s 1969 discovery of the Ekofisk field in the North Sea was a major turning point. Ekofisk became a significant producing asset, but the North Sea business was also associated with the 1980 Alexander L. Kielland disaster. The semi-submersible drilling rig capsized in the Ekofisk area, killing 123 people. Phillips Norway had chartered the rig, although it was owned and operated by another company. Litigation brought by survivors and relatives was dismissed on jurisdictional grounds, and the United States Supreme Court declined to review the case. Phillips continued to strengthen its downstream and marketing activities. In 1966 it bought Tidewater Oil’s West Coast operations and converted the Flying A outlets to Phillips 66 stations. In 1983 it acquired General American Oil Company, an independent company with oil wells, refining assets, and international interests. The acquisition broadened Phillips’s production portfolio, but the company soon faced financial and strategic pressure. In late 1984 T. Boone Pickens Jr.’s Mesa Power attempted a hostile takeover of Phillips Petroleum. After that effort failed, Carl Icahn pursued a separate takeover campaign. Phillips defended itself and remained independent, but its recapitalization increased debt. The debt burden contributed to asset sales and restructuring during the following years. Industrial accidents also damaged the company’s reputation. A 1989 explosion at its Pasadena, Texas, complex killed 23 workers and contractors and injured 314 people. Further explosions occurred at the same complex in 1999 and 2000, including a 1999 incident that killed two contractors and a 2000 incident that killed one person. In 2000 Phillips combined its worldwide chemicals operations with Chevron’s chemicals business, creating Chevron Phillips Chemical Company. In 2002 it merged with Conoco Inc. to form ConocoPhillips. The combined company moved its headquarters to Houston and continued using the Phillips 66 trademark. In 2012 ConocoPhillips separated its upstream business from its midstream and downstream operations. The downstream company adopted the name Phillips 66, preserving the historic consumer brand and incorporating refinery, chemical, pipeline, and marketing assets descended from the earlier Phillips enterprise.

• 2012

  Phillips 66 separated as a successor company

  [1]Phillips Petroleum Companyen.wikipedia.org

  ConocoPhillips separated its downstream and midstream activities into a company named Phillips 66.

• 2002

  Merger with Conoco

  [1]Phillips Petroleum Companyen.wikipedia.org

  Phillips Petroleum merged with Conoco Inc. to create ConocoPhillips.

• 2000

  Chevron Phillips Chemical formed

  [1]Phillips Petroleum Companyen.wikipedia.org

  Phillips and Chevron combined their worldwide chemicals businesses in a new joint company.

• 1989

  Pasadena industrial explosion

  [1]Phillips Petroleum Companyen.wikipedia.org

  An explosion at the Pasadena complex killed 23 people and injured 314.

• 1983

  General American Oil acquired

  [1]Phillips Petroleum Companyen.wikipedia.org

  Phillips purchased General American Oil Company, broadening its domestic and international oil interests.

• 1969

  Ekofisk discovered

  [1]Phillips Petroleum Companyen.wikipedia.org

  Phillips discovered the Ekofisk field in the North Sea on December 23.

• 1966

  Tidewater West Coast operations acquired

  [1]Phillips Petroleum Companyen.wikipedia.org

  Phillips acquired Tidewater Oil’s West Coast operations and converted Flying A outlets to Phillips 66 stations.

• 1954

  Supreme Court natural-gas pricing decision

  [1]Phillips Petroleum Companyen.wikipedia.org

  The Supreme Court held that federal regulation applied to certain natural-gas wellhead prices under the Natural Gas Act.

• 1942

  Hugoton-Panhandle expansion

  [1]Phillips Petroleum Companyen.wikipedia.org

  Phillips acquired extensive acreage in the Hugoton-Panhandle fields and a minority interest in Panhandle Eastern Pipeline Company.

• 1940

  Hydrofluoric-acid alkylation process developed

  [1]Phillips Petroleum Companyen.wikipedia.org

  Phillips developed an HF alkylation process that supported production of higher-octane fuel components.

• 1930

  Phillips 66 trademark introduced

  [1]Phillips Petroleum Companyen.wikipedia.org

  Phillips created the Phillips 66 name and trademark for its gasoline business.

• 1927

  First refinery and service station

  [1]Phillips Petroleum Companyen.wikipedia.org

  The company opened its first refinery in Borger, Texas, and its first service station in Wichita, Kansas.

• 1925

  Natural-gas-liquids leadership

  [1]Phillips Petroleum Companyen.wikipedia.org

  Phillips became the largest producer of natural-gas liquids in the United States.

• 1917

  Phillips Petroleum is incorporated

  [1]Phillips Petroleum Companyen.wikipedia.org

  Frank Phillips and L. E. Phillips incorporated Phillips Petroleum Company in Bartlesville, Oklahoma.

Integrated American oil, natural-gas, refining, fuel-marketing, and chemicals company

• Fuel retail and petroleum products · 1930

  Phillips 66

  Introduced in 1930, Phillips 66 was Phillips Petroleum’s principal consumer-facing fuel brand. It was used for gasoline, service stations, transportation fuels, and related automotive petroleum products. The brand expanded through Phillips’s retail network and the rebranding of acquired outlets, including former Flying A stations on the West Coast. After the 2002 merger with Conoco, the trademark continued within the combined company and later became the name of the downstream company separated from ConocoPhillips in 2012.

• Refining · 1927

  Refined petroleum fuels

  Phillips produced gasoline, kerosene, fuel oils, aviation gasoline, jet fuel, and other refined petroleum products. Its refining business began with the 1927 Borger, Texas, refinery and expanded as the company developed an integrated network linking crude production, transportation, processing, and marketing. Wartime demand encouraged investment in higher-octane fuels and specialized refinery processes.

• Upstream energy

  Natural gas and natural-gas liquids

  Natural gas and natural-gas liquids were central to Phillips’s early growth. The company developed production and gathering activities around the Panhandle and Hugoton fields and became the largest United States producer of natural-gas liquids by 1925. Its business included gas production, processing, transportation interests, and supply relationships, although some pipeline holdings were later divested.

• North Sea oil and gas field · 1969

  Ekofisk

  Ekofisk was discovered by Phillips in the North Sea in 1969 and became the company’s most prominent international exploration success. The field supported a large offshore production system and helped establish Phillips as a significant international energy operator. The Ekofisk business was also linked to the 1980 Alexander L. Kielland disaster involving a chartered drilling rig.

• Chemicals and fertilizers

  Phillips Chemical products

  Phillips Chemical produced petrochemical intermediates, polymers, ammonia, and fertilizer-related products. Its operations grew after the Second World War and included a major Houston Ship Channel complex. The chemicals business was combined with Chevron’s worldwide chemicals operations in 2000 to form Chevron Phillips Chemical Company, which became a successor to this part of Phillips Petroleum’s industrial portfolio.

• 2000

  Second K-Resin plant explosion

  A further explosion at the Pasadena K-Resin facility killed one person.

  Source

• 1999

  K-Resin plant explosion

  An explosion and fire at the Pasadena K-Resin plant killed two contractors and injured three others during work involving a pipe and molten plastic.

  Source

• 1989

  Pasadena Phillips explosion

  An explosion at the company’s Pasadena, Texas, complex killed 23 employees and contractors and injured 314 people. The blast caused extensive damage in surrounding areas.

  Source

• 1980

  Alexander L. Kielland disaster

  The Alexander L. Kielland drilling rig capsized in the Ekofisk field area, killing 123 people. Phillips Norway had chartered the rig, which was owned by another company. Litigation by survivors and relatives was dismissed on jurisdictional grounds.

  Source

Read more

• 1966Flying A outlet rebranding

  United States West Coast

  Following its acquisition of Tidewater Oil’s West Coast operations, Phillips converted Flying A service stations to the Phillips 66 identity.

  Outcome. The campaign expanded the geographic reach of the Phillips 66 retail network.

  Source
• 1930Phillips 66 brand launch

  United States

  Phillips introduced the Phillips 66 trademark for its gasoline and service-station business, creating a durable national consumer brand.

  Outcome. The name survived the Conoco merger and was later adopted by the downstream company separated from ConocoPhillips.

  Source

• 2012

  Separate upstream and downstream businessesGeneration change

  Background

  ConocoPhillips reorganized its business to separate exploration and production from midstream and downstream operations.

  Action taken

  The legacy ConocoPhillips company retained the upstream identity, while the separated company adopted the Phillips 66 name.

  Aftermath

  Refining, chemicals, pipelines, and fuel-marketing assets associated with the former Phillips Petroleum lineage continued under Phillips 66.

  Source

• 2002

  Merge with ConocoM&A

  Background

  Debt, asset sales, and pressure to strengthen the company’s competitive position preceded a combination with Conoco Inc.

  Action taken

  Phillips Petroleum merged with Conoco on August 30, 2002, creating ConocoPhillips.

  Aftermath

  Phillips Petroleum ceased to operate as an independent company. Its brands and assets continued through ConocoPhillips and later Phillips 66 and Chevron Phillips Chemical.

  Source

• 2000

  Combine chemicals operations with ChevronM&A

  Background

  Phillips and Chevron sought to consolidate their worldwide chemicals businesses.

  Action taken

  The companies formed Chevron Phillips Chemical Company, excluding Chevron’s Oronite additives business.

  Aftermath

  The joint venture became the successor to much of Phillips Petroleum’s chemicals platform.

  Source

• 1985

  Respond to Carl Icahn takeover attemptStrategy

  Background

  After the Mesa campaign failed, Carl Icahn launched a separate hostile takeover effort.

  Action taken

  Phillips continued its defense as an independent company and pursued measures to manage the takeover pressure.

  Aftermath

  The defensive financing structure left the company with substantial debt and encouraged later asset disposals.

  Source

• 1984

  Defend against Mesa Power takeoverStrategy

  Background

  Phillips faced a hostile takeover attempt led by T. Boone Pickens Jr.’s Mesa Power.

  Action taken

  The company resisted the bid and remained independent, using a recapitalization that increased debt.

  Aftermath

  The greater debt burden contributed to asset sales and financial pressure in the years before the Conoco merger.

  Source

• 2002

  Phillips Petroleum merges with Conoco[1]Phillips Petroleum Companyen.wikipedia.org

  M&A

  Phillips Petroleum merged with Conoco Inc. to form ConocoPhillips, ending Phillips Petroleum’s independent corporate existence.

• 1985

  Carl Icahn makes a separate takeover attempt[1]Phillips Petroleum Companyen.wikipedia.org

  M&A

  After the Mesa campaign failed, Carl Icahn pursued a separate hostile takeover effort against Phillips.

• 1984

  Mesa Power launches hostile takeover attempt[1]Phillips Petroleum Companyen.wikipedia.org

  M&A

  Mesa Power, led by T. Boone Pickens Jr., attempted to acquire Phillips Petroleum in a hostile takeover campaign.

• 1969

  Phillips discovers Ekofisk in the North Sea[1]Phillips Petroleum Companyen.wikipedia.org

  Other

  Phillips Petroleum discovered oil and gas at the Ekofisk field in the North Sea, creating one of the company’s most significant international assets.

1. 1Phillips Petroleum Companyen.wikipedia.org