Phillips Petroleum Company is a major diversified energy firm engaged internationally in oil and gas exploration and production. Phillips refines, markets, and transports petroleum, and it also gathers, processes, and markets natural gas, principally in the United States. In addition, the company manufactures and sells chemicals and plastics worldwide.
Two brothers, Frank (1873–1950) and Lee Eldas (1876–1944) Phillips, entered the oil business in 1903. In 1905 they drilled their first gusher when the Anna Anderson No. 1, located in Indian Territory, hit oil on leased land owned by an eight-year-old Delaware Indian girl of that name. The Phillips brothers remained in the oil business until 1915, when they decided to leave petroleum for banking. However, they soon realized that U.S. involvement in World War I would precipitate a steep rise in petroleum demand. They reconsidered their decision to leave the oil business and incorporated Phillips Petroleum Company in Bartlesville, Oklahoma, on June 13, 1917.
After discovery of the huge Panhandle gas field in 1918, Phillips profited from the burgeoning natural gas industry. In particular, Phillips specialized in the extraction of liquids from natural gas. By the mid-1920s, Phillips was the largest producer of natural gas liquids in the United States.
Since the late 1920s, consumers have recognized Phillips for its distinctive Phillips 66 service stations. Phillips originally entered the retail gasoline business to profit from the rapidly increasing demand for automobile fuel. In 1927 Phillips opened its first oil refinery near Borger in the Texas Panhandle, and in the same year the company opened its first service station in Wichita, Kansas.
During the Great Depression, Phillips posted its first loss ($5.7 million), and its stock price fell from $32 to $3 per share. The company persevered. During World War II, Phillips contributed to innovations in synthetic rubber and high-octane aviation gasoline. In the late 1940s Phillips entered the chemical business when it formed Phillips Chemical Company, a wholly owned subsidiary that operated a large facility by the Houston Ship Channel. In the 1950s Phillips began producing a polyolefin plastic trademarked as Marlex. Marlex was the most common plastic used in the manufacture of hula hoops, which became ubiquitous in that decade.
Beginning in the mid-1940s, Phillips explored for petroleum internationally, first in Venezuela, Canada, and Colombia and later in the Middle East. Phillips pioneered the industry in Alaska when it participated in a drilling project at Cook Inlet in 1962 and also at Prudhoe Bay on the North Slope. Phillips's most spectacular discovery was the massive Ekofisk field in the Norwegian sector of the North Sea. Phillips also participated in a project to manufacture and ship liquefied natural gas (LNG) from Alaska to Japan during the late 1960s.
During the 1980s, Phillips Petroleum survived hostile takeover attempts by groups led by T. Boone Pickens Jr. and Carl C. Ichan. Remaining independent was an expensive proposition that tripled Phillips's corporate debt. Phillips's financial condition, exacerbated by turmoil in the oil industry, caused it to either sell off or shut down some of its assets, including fertilizer, carbon black, and synthetic rubber plants. By the 1990s, Phillips had combined restructuring efforts with continued international and domestic business expansion. Phillips celebrated its eightieth anniversary in 1997 and remains the only major U.S. oil company still bearing its founders' name.
Christopher J. Castandea California State University, Sacramento
Wallis, Michael. Oil Man: The Story of Frank Phillips and the Birth of Phillips Petroleum. New York: Doubleday, 1988.
Wertz, William C., ed. Phillips: The First 66 Years. Bartlesville OK: Phillips Petroleum Company, 1983.