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"We will continue as an international integrated company, but somewhat smaller," Mulva told analysts and media during a conference call.
Houston-based ConocoPhillips, the oil and gas giant merged out of two historic Oklahoma companies seven years ago, generated $1.5 billion in net income for the three months ending Sept. 30. The third-quarter profit was down 71 percent from the same time last year.
The downturn can be pinned on lower oil and natural gas prices and tighter refining margins. ConocoPhillips also ended the quarter with $30.5 billion in debt and saw its cash balance drop from $888 million to $641 million, according to the earnings report.
In response, the company plans a capital expenditure budget of about $11 billion for 2010, some $1.5 billion less than this year's outlay. The 2008 capital budget was close to $14 billion.
"We believe $11 billion really is the sweet spot for us," Mulva said. The company favors "return enhancement over growth."
ConocoPhillips plans to sell off about $10 billion worth of assets over the next year. The 9 percent stake in Syncrude Canada operations is being tested for offers, while the company also plans to divest what Mulva called "the bottom 10 percent" of its North
American exploration and production.
The refinery market is too rough to consider selling facilities right now, but ConocoPhillips could be looking for buyers of some of its "less sophisticated" refineries in 2012 and 2013, Mulva added. He did not name specific facilities; ConocoPhillips owns and operates a refinery employing 750 people in Ponca City.
"When the market gets a little bit better for selling some refineries," the CEO said, "we have in mind a number of facilities that might have some value to someone else."
ConocoPhillips is one of the world's largest integrated energy companies, with 32,000 employees and proved reserves at about 8 billion barrels of oil equivalent, according to reports. The global recession, credit-market crunch and drop in oil and gas prices has stretched the company financially.
Mulva's compensation fell to $29.4 million last year, compared with $50 million in 2007, according to reports. He remains one of the U.S. oil industry's highest paid executives.
Companywide, third-quarter earnings were down from $5.1 billion in the three-month period ending Sept. 30, 2008. ConocoPhillips has earned $3.64 billion so far in 2009, compared with $14.77 billion in the first nine months of last year.
Year-to-date production pulled up an average of 1.86 million barrels of oil equivalent per day so far this year, compared with 1.76 million BOEs by Sept. 30, 2008. The nine-month total did not include nearly 500,000 BOEs for ConocoPhillips' share in the Russian Lukoil project.
"Although we operated well, we were adversely impacted by low North American natural gas prices and worldwide refining margins, which led us to curtail" natural gas production in late August and reduce refinery costs, Mulva said in a statement before the conference call.
About 1,200 employees, or 4 percent of the ConocoPhillips work force, were laid off earlier this year. Ponca City's nonrefinery operations, which total about 700 employees, are being relocated or consolidated over two years.
ConocoPhillips also employs about 3,200 people in its Bartlesville support operations. In 2002, Bartlesville-based Phillips Petroleum Co. merged with Conoco Inc., a onetime Ponca City institution which moved its headquarters to Houston decades ago.
Trading for ConocoPhillips shares ebbed $1.41 to $49.49 per share in Wednesday's session at the New York Stock Exchange.
Rod Walton 581-8457 rod.walton@tulsaworld.com
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