Conoco, Phillips shareholders approve oil merger

HOUSTON (AP) _ Shareholders of Conoco Inc. and Phillips Petroleum Co. overwhelmingly approved the companies' proposed $15.6 billion merger Tuesday, removing another hurdle before the companies can

Tuesday, March 12th 2002, 12:00 am

By: News On 6

HOUSTON (AP) _ Shareholders of Conoco Inc. and Phillips Petroleum Co. overwhelmingly approved the companies' proposed $15.6 billion merger Tuesday, removing another hurdle before the companies can create the nation's third-largest oil corporation.

Shareholders for Houston-based Conoco and Bartlesville, Okla.-based Phillips met in those two cities and approved the merger by more than a 96 percent margin. The vote came a week after the European Union signed off on the marriage. Canada also has approved it.

The U.S. Federal Trade Commission has requested more information before it decides on the merger.

Both companies are hopeful the merger will proceed in the second half of 2002.

The new company, ConocoPhillips, would assume Conoco's home in Houston, leaving in limbo the 2,400 Phillips employees in its hometown of Bartlesville and in Ponca City.

Phillips CEO Jim Mulva said that while the size of the new company's Oklahoma workforce has not been determined, he expects many of the company's employees in the state to keep their jobs.

``We are going to have a very strong presence in Oklahoma, in Bartlesville, in Ponca City,'' he told a standing-room-only audience of more than 550 at the shareholders meeting in Bartlesville.

He said the new company would be strong.

``It really, truly is a world-class integrated petroleum company,'' Mulva said. ``Both companies feel very strongly about technology.''

In Houston, Conoco chairman Archie W. Dunham also praised the merger.

``We have complementary assets, complementary expertise and complementary business objectives,'' Dunham said, adding that 70 transition teams have been working to meld the two structures.

Though both companies describe the deal as a merger of equals, Phillips shareholders would own 56.6 percent of ConocoPhillips, with Conoco shareholders coming away with 43.4 percent.

Oklahoma politicians lobbied the new company to be based there, but executives from both components decided it made more sense to locate in Houston, the nation's fourth-largest city and energy industry hub.

Only Exxon Mobil Corp. and ChevronTexaco Corp. would be larger than ConocoPhillips in the United States, and it would be the sixth-largest investor-owned oil company worldwide.

The company would control or have stakes in 19 refineries worldwide with a capacity of 2.6 million barrels a day. It would be the United States' top refiner and would be behind 17,000 U.S. gas stations flagged by the respective corporate names along with the Circle K and 76 brands.

Joint oil reserves of the new supermajor would be about 8.7 billion barrels. The companies estimate the deal will save them $750 million annually once redundancies and an undetermined number of workers are cut.

Phillips chairman and chief executive officer James J. Mulva would be president and chief executive officer of the combined company. His lieutenants will be a mix of current Phillips and Conoco executives.

Conoco chairman Archie W. Dunham is delaying his retirement to serve as chairman of the new company until he steps down in 2004, when Mulva will add that role.

Each company would supply the new board with eight directors