Analysts Speculate On Exxon, Chevron Spin-Offs

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News that ConocoPhillips, the third-largest U.S. oil company, will split into two companies, spinning off its marketing and refining operations to shareholders, has prompted speculation from analysts regarding whether Dow components Exxon Mobil and Chevron, the two largest U.S. oil companies should do the same.

Much smaller Marathon Oil (MRO) recently completed a spin-off of its refining business and Texas-based ConocoPhillips said its own spin-off will be completed in the first half of 2012. The transaction will make ConocoPhillips (COP) the largest independent oil and gas producer in the U.S.

Both Exxon Mobil (XOM) and Chevron (CVX) have been selling some downstream assets to raise cash, but one analyst quoted by MarketWatch says a spin-off of those companies' refining and marketing businesses would not be as compelling as has been the case with Conoco and Marathon because slower growth rates on the production side of the business.

Another analyst said it would make sense for Exxon and Chevron to split their refining businesses away from their exploration and production operations, but Chevron said it is committed to its integrated business model, MarketWatch reported.