The company completed the spinoff of its downstream businesses to stockholders on April 30, with the distribution of Phillips 66 (NYSE: PSX) common stock. Following completion of this transaction, ConocoPhillips is now the world’s largest independent exploration and production company, based on proved reserves and production of liquids and natural gas.
In the Lower 48 and Latin America segment, the company continues to advance several high-margin growth projects across its asset base. Ongoing ramp up of production from liquids-rich shale plays, including Eagle Ford and Bakken, delivered approximately 50,000 barrels of oil equivalent (BOE) per day more production for the quarter than a year ago. Based on positive results to date, the company has identified extensive development potential over the next several years and is directing additional investments to these projects.
In Canada, the company’s oil sands projects continued to perform well, with production growth from Christina Lake Phase C and Surmont Phase I resulting in increased bitumen production of 20,000 BOE per day compared to the second quarter of 2011. Additionally, Surmont Phase II development and further FCCL expansion phases are on schedule and will lead to further high-margin production growth over the next several years.
In the Asia Pacific and Middle East segment, Australia Pacific LNG sanctioned the second production train in July and signed project finance agreements during the second quarter. The development and construction of all infrastructure and facilities remain on track for first delivery of LNG mid-2015. Concurrent with project sanction, ConocoPhillips further reduced its working interest in the project to 37.5 percent. This reduction, along with the project financing, lowers future capital requirements from ConocoPhillips to fund the Australia Pacific LNG project. In Malaysia, development continued on several projects, including the deepwater Gumusut oil field off the coast of Sabah, the natural gas Kebabangan Field and oil fields at Malikai and Siakap North-Petai.