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-Since late 2005, ConocoPhillips increased by 27.8%, compared to Exxon Mobil and Chevron, to 46.8% and 85.12% respectively.

- Beat the legacy of general manager Jim Mulva said he will retire once the separation is complete.

- Analysts: Conoco may have felt the split of assets under a more immediate way to boost the share price to continue to try to sell buyers refinery prices do not seem willing to pay.

- UBS analysts said the split is unlikely to raise significant incremental value.

(Rewrites first paragraph, adds analyst's comments and historical performance and share price over the bottom of the story.)

By Isabel Ordonez

Dow Jones Newswires

HOUSTON (Dow Jones) - U.S. oil giant ConocoPhillips said its refining division and production of weapons into two publicly traded companies, making it the largest energy company to date to reject the traditional industry model bigger is better business.

Houston-based ConocoPhillips said it plans to separate its oil and gas exploration and production business of refining and marketing. More energy is the company to announce such a measure, following the example of Marathon Oil Corp., El Paso Corp. and Williams Cos., among others.

ConocoPhillips's decision to divide a company with 29,600 employees and $ 160 billion of assets is a blow to the legacy of Chief Executive Jim Mulva, who said he will retire once the separation is complete. Mulva was the architect of a series of agreements to expand the company's international reach and diversify its asset portfolio, but many of these transactions were at the wrong time and some were later unwound. Mulva has previously said he plans to retire next year.

Unlike its bigger rivals Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX), ConocoPhillips embarked on a wave of acquisitions of assets at the price of oil and gas, where many active high, and over time non-essential accumulated weighed on profitability.

Mulva, who as CEO of Phillips Petroleum Co. designed the 2002 merger that created ConocoPhillips, oversaw six years of aggressive deal making. On his watch, Conoco acquired a 20% in the Russian oil company OAO Lukoil Holdings, a producer in 2004, USAgas producer Burlington Resources for $ 35 million in 2006 and paid $ 8 billion to join an Australian liquefied natural gas venture in 2008.

These agreements Conoco vault into the ranks of the largest companies in the world of oil, but left with a debt far more than their competitors. Conoco That left vulnerable when energy prices fell in late 2008. While big competitors like BP PLC and Exxon Mobil took advantage of the crisis to buy assets from weaker competitors, Conoco cut spending and laid off workers.

"We have bought and sold on high," said Philip Weiss, an energy analyst at Argus Research.

Since late 2005, ConocoPhillips increased by 27.8%, compared to Exxon Mobil and Chevron, which rose by 46.8% and 85.12% respectively.

"We conclude that [the break] was the best way to create value for our shareholders," Mulva said in a webcast with investors.

Some analysts have speculated that a split was in the works after Mulva said the company's analyst meeting in March that a spin-off under consideration.

Deutsche Bank analyst Paul Sankey said in a note to clients after Mulva was "very motivated" to proceed with the division because of their "common property". Any significant increase in the value of Conoco's actions will result in a higher retirement package of Mulva.

The separation, which does not require a shareholder vote, if approved by the Internal Revenue Service, among other regulatory bodies. It is scheduled to be completed in the first half of 2012.

In announcing the move is the most radical ConocoPhillips has taken over the past two years to increase the value of their shares. After accumulating assets, the company in 2009 launched a sale of $ 10 billion in non-core assets to bolster its debt, finance and try to satisfy investors who have sold the stock and change its investment to Smaller oil producers with greater growth potential. The program, which was scheduled to be completed this year, was extended in March.

ConocoPhillips would have thought that the downstream division of assets was a more immediate way to increase its share price to continue to try to sell the refineries at prices that buyers seem willing to pay, said Cory Garcia, an analyst with Raymond James.

"Any sale of assets, would probably have been half (price) of what they wanted. So the best value that possibility would have been spun into a separate public company, "Garcia said.

Plans to sell these non-core assets, including refinery operations low-margin, will continue through the division. The company will also continue with its plan to spend about $ 11 billion in share repurchases this year and continue to pay its dividend at the same level, Mulva said.

As an independent entity, ConocoPhillips network of oil refineries, which process crude oil into useful products like gasoline and diesel would be one of the largest in the U.S., along with Valero Corp., and be able to refine 2 million barrels of oil a day.

The division also will create largest U.S. independent oil and gas production with a daily production of about 2 million barrels of oil per day, which is approximately three times that of the Occidental Petroleum Corp. (OXY).

But some are skeptical. UBS analysts said it is unlikely to increase significantly due to incremental shares already trading at premiums compared to their peers, and their refining assets is less attractive than other refiners.

Others said the measure could revolutionize the business model of other major integrated oil companies.

Oil giants like Exxon Mobil, Chevron and ConocoPhillips rose from the ashes of Rockefeller's Standard Oil, the oil monopoly broken by the U.S. Supreme Court in 1911.

While demand for petroleum products was growing rapidly, the integrated model appeals to investors. However, much of the growth in oil demand has shifted to Asia, and refiners have seen profits grow in this segment. Both Chevron and Exxon Mobil have refined assets in Asia.

Meanwhile, U.S. refiners were left with excess capacity. Currently, 88% of capacity is being used from the week of July 8, according to the U.S. Department of Energy. In its heyday, the refining industry run almost 100% in summer 1998.

"It remains to be seen whether the aggressive move of Conoco deeper causes changes in their rivals," said Fadel Gheit, an analyst at Oppenheimer.

Mulva said the factors that made the model of integrated value in the past have changed.

"In the past, the view has been built to take you to get access to better investment opportunities. We believe that has changed," said Mulva.

The division will give shareholders the opportunity to choose for themselves whether they want to invest in the refining business or not, he said.

"If you look at the integrated firm, I think some downstream stops in creating business value of exploration and production," said Mulva. Having two companies will also help management to focus on specific areas, he added.

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