Mulva, James J. 1946–
James J. Mulva
President and chief executive officer, ConocoPhillips
Born: June 19, 1946, in Oshkosh, Wisconsin.
Education: University of Texas, BBA, 1968; MBA, 1969.
Family: Married Miriam (maiden name unknown), 1969; children: two.
Career: Phillips Petroleum Company, 1973–1974, management trainee and treasurer; 1974–1976, assistant treasurer; 1976–1980, manager of foreign exchange and investment; 1980–1984, vice president and treasurer of Europe/Africa; 1984–1985, manager of corporate planning; 1985–1986, assistant treasurer; 1986–1988, treasurer; 1988–1990, vice president and treasurer; 1990–1999, chief financial officer; 1994–1999, president and chief operating officer; 1999, vice chairman; 1999–2002, chairman, president, and chief executive officer; ConocoPhillips, 2002–, president and chief executive officer.
Awards: Named Petroleum Executive of the Year by a representative group of senior oil executives at the 23rd annual Oil and Money Conference, 2002.
Address: ConocoPhillips, 600 North Dairy Ashford, P.O. Box 2197, Houston, Texas 77252-2197; http://www.conocophillips.com.
■ James Mulva served as president and chief executive officer of Phillips Petroleum Company. During his tenure at Phillips, Mulva guided the company into profitable markets in Europe and Russia and headed the successful merger of Phillips with Conoco to form ConocoPhillips. Coworkers and industry peers described Mulva as a capable leader who was able to implement new technology, learn from other companies' mistakes, and direct financial decisions to meet and exceed corporate goals.
AN INTRODUCTION TO THE IMPORTANCE OF OIL
After graduating from the University of Texas with a BBA in finance and an MBA in business administration, Mulva immediately
began a tour of duty in the U.S. Navy. During his first two years in the Navy, he was stationed on Bahrain Island. At that time, Bahrain and Saudi Arabia were producing enormous amounts of oil and natural gas, and Mulva was able to learn about the size and importance of the energy industry. After exposure to the production side of the sector, Mulva became intrigued by the complexity and geopolitical impact of the financial aspects of the energy industry.
USING FINANCIAL SKILLS IN A CORPORATE SETTING
In 1973 Mulva completed his tour of duty in the Navy and decided to enter the energy industry in the financial end of the business. During his job search, Mulva found a position in the treasury department at Phillips Petroleum Company that was a good entry-level fit. This job provided Mulva with the challenge he was looking for as well as practical financial knowledge and an introduction to the petroleum industry. Although Mulva had begun at Phillips without a plan to become a high-level executive, he was promoted based on his hard work and his ability to analyze a situation and determine a solution that resulted in profit to the company.
Mulva worked carefully through successive positions at Phillips to build the company's long-term security and assets. This work called for an understanding of the global market and culture before many U.S. companies in the sector had ventured outside the United States. As vice president and treasurer of the Europe/Africa division of Phillips from 1980 to 1984, Mulva had to make critical oil-related decisions about where to focus assets. During a time when many oil companies were drilling in the Middle East, Mulva avoided Middle Eastern oil purchases and concentrated instead on new finds in other world locations. For example, in 1994 Phillips began focusing on the first offshore oil field in China to begin oil production. After becoming CEO of Phillips in 1999, Mulva continued this trend to keep assets focused in the North Sea, Venezuela, Asia, North America, Kazakhstan, and Russia. By concentrating on new markets in Europe, South America, and Asia, Mulva made a stable long-term investment that avoided acquisition of assets in volatile Middle East reserves.
Mulva did not completely avoid volatile markets. In June 2004, when Russia began to privatize its oil industry, Mulva strongly pursued a 25 percent share of the Russian oil company Lukoil. He believed that he would have the ability to make the companies more efficient and profitable and increase assets while stabilizing the Russian economy. Although Mulva felt that his plan would enhance the business and social climate in Russia, the long-term success of Mulva's Russian proposal was still unknown in the early 2000s.
Beyond purchasing assets in foreign markets, Mulva tried to pass on to his counterparts in foreign oil companies some of the knowledge he gained by entering the global market early in its development. Mulva focused on executives in foreign oil companies in such countries as Russia and China by helping them train their management personnel, handle new technology, and cooperate with transnational companies.
NOT JUST GAS
Although Phillips Petroleum Corporation was not immediately associated with plastics production, a large portion of the global industry Mulva was working with in Asia included production of polyethylene plastics made from natural gas liquids. In 1996 Mulva assisted Phillips in creating a joint venture agreement to produce polyethylene plastic in China. By the time Mulva became CEO in 1999, Phillips was also involved in the manufacture of polyolefin plastics and other chemicals.
Mulva's career in the petroleum industry spanned several technological changes in the way the industry obtained oil. The land-based oil derricks in Oklahoma discovered by the Phillips brothers had been replaced by offshore drilling and creation of pipelines. New refinery processes meant application of new technology and, with it, new regulations. In the face of these changes, Mulva advocated creation of a federal system of regulations that refiners should accept "because that is what their customers, stakeholders, and constituents are demanding" (Oil Daily, March 25, 2003).
In 2004 Mulva led ConocoPhillips to join a U.S. Department of Energy pilot project experimenting with the use of hydrogen-based transportation. As part of the project, ConocoPhillips planned to equip several fueling stations with the ability to dispense liquid and gaseous hydrogen made from both fossil fuels and renewable energy sources. Although the hydrogen-based technology was in its infancy, the project allowed ConocoPhillips and the other members of the project team to evaluate hydrogen's potential as a new transportation technology. Mulva recognized that to ensure long-term growth for the company, ConocoPhillips had to become a leader in the pursuit and implementation of cleaner energy sources. Mulva underlined his commitment to new sources of fuel by actively seeking out such projects as the U.S. Department of Energy pilot project on hydrogen-based technology.
In addition to leading the industry in the examination of new technology, Mulva looked toward increased benefits for customers. Mulva and his team developed the ConocoPhillips "fleet card," a credit card that can be used at Conoco gas stations, Phillips 66 gas stations, and 76 gas stations. Unlike other gas company cards, it is accepted at many local maintenance facilities as well. To assist clients with tracking and paying their bills, online account management is available.
Mulva's financial background allowed him to analyze new ideas and proposals carefully, to examine the bottom line, and effectively to predict the ideas' long-term financial impact on the firm. This methodical approach helped him create a strategic plan to meet and exceed corporate goals and decide which new technologies would be profitable. Mulva also maintained a level of transparency in his actions that emphasized his honesty in business. As he frequently said, "If you don't have your health and your integrity, you don't have much to offer" (ConocoPhillips Newsroom, May 16, 2003). This transparency increased in importance in 2001, when it was learned that energy executives at Enron, an interstate and intrastate natural gas pipeline company also involved in trade of commodities, had manipulated financial statements to create an illusion of success. The discovery of the deception resulted in a financial crash that lost investors' money and bankrupted the company. After the Enron scandal, regulators took a close look at other energy companies and their executives. Mulva's policy of transparency and honesty protected Phillips from suspicions of financial mismanagement. In 2002 Mulva's peers acknowledged his leadership and ability in an increasingly difficult business environment by presenting to him the Petroleum Executive of the Year award.
Given Phillips's global presence, Mulva felt that it was important to try to bring something other than jobs and oil to its operation locations. Primary among these goals was Mulva's desire to ensure that the company's operations did not have an adverse impact on community health and safety. This meant that proper safety measures had to be put in place to avoid increases in air, water, and land pollution as well as to protect the community from product spills. Also important to Mulva was the concept of contributing to the communities in which Phillips's employees worked. Phillips, and later ConocoPhillips, supported business internship programs, continued scholarship programs (such as the Phillips 66er's Scholarship Program), and established the Phillips Petroleum Endowed Professorships and Exchange Fellowships.
In 2000 Mulva faced a tragic situation when a K-resin chemical tank exploded at a Phillips Petroleum Company chemical plant in Pasadena. The explosion killed one worker, seriously burned four workers, and injured 65 other employees. The resulting fire also produced toxic fumes that spread over the surrounding neighborhoods. The blast was especially worrisome because it was the third time in 11 years that an explosion had occurred at that plant. In the wake of the disaster, Mulva had to answer accusations that Phillips's attempts to cut costs had endangered their employees, created an unsafe work environment, and resulted in the large explosions. To salvage Phillips's reputation for safety and its concern for its workers, Mulva and Phillips paid a large Occupational Safety and Health Administration (OSHA) fine for safety violations, concentrated on improving plant safety, and cooperated with investigators to help establish accountability for the explosions.
Following the 1989 Exxon Valdez incident, in which approximately 11 million gallons of oil were spilled out of a damaged oil tanker off the coast of Alaska, worldwide public attention was focused on petroleum companies and their environmental records. Although Mulva's time as CEO did not begin until five years after the spill, the Valdez 's legacy and legislation were a constant concern that shaped the operations of the petroleum company. As Phillips's CEO, Mulva focused on the environmental impact of petroleum operations. He was determined to learn how to increase Phillips's holdings of oil through exploration and production without damaging the environment. Given the ability of most of Phillips's products to cause environmental destruction if spilled, Mulva directed frequent safety inspections of production operations, trained employees in safe practices, and instituted more safety measures to ensure that an incident like the Valdez accident would not occur.
CAREFUL ACQUISITIONS AND MERGERS LEAD TO PROFIT
As CEO of Phillips, Mulva created a five-year strategic plan that used several mergers and acquisitions to make the company more competitive and increase oil exploration and production. Through increasing oil exploration and production, Phillips hoped to avoid being taken over by the huge companies resulting from the mergers of medium-sized businesses, such as Exxon and Mobil and Chevron and Texaco.
In February 2000 Phillips joined its chemical and plastic operations with Chevron to create the Chevron Phillips Chemical Company. For Phillips, the plastics and chemical portion of the company began to decline in strategic importance as an asset as Phillips focused on a new strategic plan for the oil-and-gas sector of the business and a series of explosions at Phillips plants in 1999 and 2000 created public image problems. Through the spin-off and joint venture, Mulva helped create a global chemical production company with an excellent financial position, more assets, and enhanced growth prospects.
In April 2000 Mulva led Phillips in the acquisition of the Alaskan oil-and-gas production assets of the Atlantic Richfield Company in an attempt to boost its upstream exploration and production. The Alaskan assets were sold to satisfy the terms of a legal settlement that resulted from the large BP Amoco/Arco merger. The assets augmented Phillips's holdings in a nonvolatile location and increased the company's barrels of oil equivalence to 2.2 billion reserve barrels of oil and 340 thousand new barrels per day of production.
The 2001 merger with the Tosco Corporation, a refining, marketing, and transmission business, helped Phillips grow its refining business to become the second largest in the United States and the third-largest seller of motor gasoline in the United States. Phillips also added Tosco's large convenience store market and 6,400 gas stations to its lists of assets. Next came Phillips's merger with Conoco to become ConocoPhilips. Nationally, this merger moved the combined company to a position as the largest refiner in the United States and the third-largest energy company. Internationally, the merger put ConocoPhillips into position as the sixth-largest energy company in the world. At the time Mulva became CEO in 1999, the company's assets were about $15 billion; after the merger was completed in 2002, the company's assets exceeded $75 billion. Mulva had learned more about large oil company mergers by watching carefully the successes and failures of the merger of Mobil and Exxon in 1998 and Chevron and Texaco in 2001. He chose a financial strategy that focused more on saving money and cutting capital spending than on growth in the first years. The strategy produced enhanced financial returns and less debt for ConocoPhillips. By the end of the first quarter of 2004, the company had an income of $1.9 billion and had come very close to paring its debt down to 32 percent of its capital.
See also entry on Phillips Petroleum Company in International Directory of Company Histories.
sources for further information
Merolli, Paul, "ConocoPhillips CEO Optimistic about Refiners' Future Despite Challenges," Oil Daily, March 25, 2003, p. 1.
Mulva, Jim, "Change the World: Commencement Remarks to UT MBA Graduates," May 16, 2003, ConocoPhillips Newsroom, http://www.conocophillips.com/news/speeches/051603_utbiz.asp.
O'Hanlon, John, "James J. Mulva, Chairman and Chief Executive Officer, Phillips Petroleum Company-Interview," Wall Street Corporate Reporter, December 14, 2000.
—Dawn Jacob Laney