Oct. 28--ConocoPhillips said it is considering selling oil and gas properties in North America and in the North Sea, as well as pipelines and terminals in the U.S. and its 9 percent stake in Syncrude Canada, as part of a sweeping plan announced earlier this month to reduce company debts and improve shareholder returns, CEO Jim Mulva said today.

Under the plan, the company aims to sell $10 billion worth of company assets in 2010 and 2011 and slash its capital spending budget by 12 percent to $11 billion in 2010.

The company has no current plans to sell oil refineries as part of the $10 billion program, partly because valuations are so low at the moment, Mulva said. But by 2012 or 2013, if the market improves, it may consider unloading less-sophisticated and less competitive refineries, he said.

ConocoPhillips also intends to retain a "strategic relationship" with Russia's Lukoil, and has no plans to sell its 20 percent stake in the firm as part of the $10 billion program, officials said.

Instead, ConocoPhillips is targeting its bottom 10 percent of oil and gas properties in Canada and the lower 48 states and natural gas properties in the North Sea's Southern basin.

"Some will say what we're doing essentially is that we're shrinking to grow," Mulva said. "That would be a fair assessment."

He said the program represents a change in strategy from recent years, to a focus on greater shareholder value over growth. The change is necessary given the dramatic drop in energy demand with the global recession and growing difficulty accessing new reserves, he said.

The company will provide more details of the asset-sale program early next year, Mulva said.

The update came as the Houston-based oil major reported a 71 percent drop in third-quarter earnings--still beating Wall Street expectations--as lower crude oil and natural gas prices and weak oil refining margins worldwide weighed on the bottom line.

Net income slipped to $1.5 billion, or $1 per share, from $5.2 billion, or $3.39 per share, in the July-to-September period in 2008, the company said in a statement this morning. Revenue dropped to $41.3 billion, from $71.4 billion in the year-ago quarter.

Analysts had on average expected the company to earn $1.4 billion, or 94 cents per share, on revenue of $35.4 billion, according to a survey by Thomson One.

But the company said its oil and gas production and oil refinery utilization were both higher than they were at this time last year, and that its operating costs were down.