Seabed subsidenceEkofisk March begins

Phillips fights off unfriendly takeover

person by the Norwegian Petroleum Museum
The solid position of the Ekofisk field in the North Sea prompted aggressive share speculators T Boone Pickens and Carl C Ichans to identify Phillips in the early 1980s as an attractive target. But they miscalculated the company’s strength and supporters.
— Photo: Steve Jurvetson
© Norsk Oljemuseum

When the well-dressed aggressors arrived at the Phillips head office in Bartlesville, Oklahoma, they encountered a general meeting where the formal business could not begin before a pastor from one of more than 60 Christian congregations in the town had held an introductory prayer.

While the battle over Phillips was being fought, prayers were said for it in the Bartlesville churches. This was an involvement worthy of a company with its roots in the US Bible Belt.[REMOVE]Fotnote: Lerøen, Bjørn Vidar, 1001 brønn. Oljedirektoratet 1972-1997.

To frustrate the plans of Pickens and Ichans, Phillips raised USD 4.5 billion in credit insurance in exchange for 73 million shares. This huge increase in debt led to a dramatic restructuring of the company.

Chair C J “Pete” Silas warned the employees: “We’ll be a different (smaller) company from now on.” The goal was to cut operating costs by USD 200 million in 1985 and USD 300 million the following year.

A number of measures were instituted to achieve this. One was an early retirement programme to trim 1 500 people from the payroll by 1985.

But Phillips also had to reduce its liabilities by USD 2 billion within 12 months. This was achieved by selling off its assets.

Several parts of the company were put up for sale – geothermal energy, coal, fertiliser, mining chemicals, natural gas liquids in North Dakota, interests in British refineries, an office building in Denver and a hotel in Fort Lauderdale.

However, selling oil and gas assets was never contemplated. And one property Phillips was definitely going to keep was Ekofisk.

Rumours had circulated about a possible sale for a long time, but this North Sea field was very profitable and had been the cornerstone of the company’s oil and gas production for years.[REMOVE]Fotnote: PhillipsNytt, August 1985.

 

Seabed subsidenceEkofisk March begins
Published 20. June 2019   •   Updated 15. September 2019
© Norsk Oljemuseum
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