Oil’s discards show the thrill of boring spinoffs

Storage tanks are seen at Marathon Petroleum’s Los Angeles Refinery, which processes domestic & imported crude oil, in Carson, California, U.S., March 11, 2022. Picture taken March 11, 2022. Picture taken with a drone.

Spinning off slow-growing, low-margin businesses is often an easy decision for companies as bosses prefer to spend time on more exciting parts of a firm. The performance of oil refiners like the $54 billion Marathon Petroleum (MPC.N) and the $48 billion Phillips 66 (PSX.N) over the past decade, shows the best thrills for investors can lie in the discards.

A decade ago, oil firms were minting profits. The price of oil held steady above $100 a barrel, and executives and investors questioned why companies like Marathon Oil (MRO.N) and ConocoPhillips (COP.N) were bothering with operations that refine the oil rather than just concentrating on pulling more out of the ground.

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