Hess, under pressure, to exit retail business

Written By Unknown on Selasa, 05 Maret 2013 | 00.33

NEW YORK — Hess will rid itself of its retail operations as well as its energy trading and marketing businesses as it shifts its focus further into exploration and production.

The company will also nominate a slate of six independent directors to its board, replacing six that already hold seats.

The announcement arrives about a month after the hedge fund Elliott Management, one of the company's largest shareholders, accused the board of "poor oversight," and said that the company's management was responsible for more than a "decade of failures."

Elliott, which holds a 4 percent stake in Hess, is pushing to seat five outsiders on the board.

But Hess rejected Elliott's nominees in a letter to shareholders Monday, accusing the firm of trying to disrupt progress it has already made in reshaping itself. It said that Elliott hasn't taken into account how much company shares have risen since it began to shed previous business models.

Hess said the nominees chosen by Elliott would effectively dismantle the company.

Hess shares fell sharply after the recession, as did shares of most energy companies, but the stock began to rebound last summer and on Monday, they hit their highest levels almost two years.

Shedding the green and white gas stations that stretch from New Hampshire to Florida will allow Hess to broaden exploration and production capabilities.

Hess, based in New York, has already announced the sale of U.S. oil storage terminals and plans to close a New Jersey refinery as it exits the volatile refining business. Other energy companies are doing much the same, focusing the booming domestic drilling and also high-risk drilling operations at deep-water drill sites.

Murphy Oil, ConocoPhillips and Marathon Oil Corp. have all split off their refining businesses in recent years to focus on exploration and production.

Hess did not elaborate on the sale of portions of the company and a spokesman did not immediately return phone calls from The Associated Press.

Elliott has said it wants Hess to boost shareholder value through various means, including a potential spin-off of the oil company's holdings in North Dakota's Bakken shale-oil field.

Elliott officials didn't immediately return an email sent through the firm's website.

Hess shares rose $2.48, or 4 percent, to $69.02 in midday trading.


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