Looking to return focus to its core businesses and higher returns, ConocoPhillips entered into an agreement with Canadian convenience store mogul Alimentation Couche-Tard Inc. on Monday for the sale of the Circle K Corp., which comprises 1,663 retail marketing outlets in 16 states and the Circle K brand, as well as the assignment of the franchise relationship with more than 350 franchised and licensed stores.

As part of the agreement, ConocoPhillips will continue to supply 1.2 billion gallons of gasoline per year for the next two to five years at market related pricing.

“This agreement is a significant step toward the planned rationalization of our downstream portfolio,” said Jim Nokes, ConocoPhillips’ executive vice president of refining, marketing, supply and transportation. “Completion of this sale will mark the beginning of a stronger focus on our wholesale channels of trade. The sale of this business and various retail marketing asset packages will enable us to reallocate capital to projects that provide higher returns.”

ConocoPhillips said in late 2002 that it would sell a substantial portion of its retail marketing assets and exit certain geographic regions. The company’s international marketing assets are not included in this effort. To date, the company has completed the sale of its New York and New England marketing assets.

Once the planned dispositions are complete, ConocoPhillips said it will primarily focus on operating its wholesale business, but will retain and operate approximately 300-350 retail outlets that complement its refining and transportation network.

The company said it does not expect that the Circle K transaction will result in any adjustment to the previously recorded impairment provisions related to the company’s rationalization plan for its retail marketing assets. Operating results related to the business will continue to be reflected as discontinued operations until closing, which is expected in the fourth quarter. ConocoPhillips said it plans to use the proceeds to lower debt.

As a result of this transaction, the company expects its number of employees to fall from approximately 55,800 to around 38,400 worldwide.

©Copyright 2003 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.