James J. Mulva's career spanned some megacycles in the industry, and as a Navy veteran, he successfully rode the waves through dramatic eras of expansion, retrenchment, consolidation and restructuring. In 2012, Phillips 66, a downstream company, was spun out from ConocoPhillips, now the largest independent E&P, and Mulva retired as chairman and chief executive officer.

The Wisconsin native earned his bachelor’s and master’s degrees in finance from The University of Texas at Austin and immediately served as a U.S. Naval officer in the Middle East. Subsequent to Navy service, he began his energy career with Phillips Petroleum in 1973, rising to chairman and chief executive in 1999.

During his term as head of Phillips and ConocoPhillips, he engineered the acquisition of Arco Alaska, the Chevron Phillips Chemical joint venture, the NGL joint venture with Duke/Spectra, the merger of Phillips and Conoco, the Canadian oil-sands venture with Cenovus and the acquisition of Burlington Resources.

Mulva was named a Distinguished Alumnus of UT and received an honorary doctorate in engineering from the Colorado School of Mines. He serves on the board of directors of General Electric, General Motors, Statoil and the M.D. Anderson Cancer Center. He flies airplanes, collects cars and plays golf. In addition to his board activities, he and his wife, Miriam, direct a great deal of time to philanthropic initiatives promoting education, youth and the Catholic Church.

Investor: How did a guy from Wisconsin end up running a major in Oklahoma?

Mulva: The Navy sent me to school on a scholarship and directed attendance at UT. Based on my study of finance and Navy tours in the Arabian Gulf and Central Finance Center in Cleveland, my interest quickly developed in the oil and gas industry. So it was a natural fit to join Phillips Petroleum’s treasury department in Bartlesville, Oklahoma, in 1973.

Investor: The nature of the industry changed a lot during your career.

Mulva: Early in my career, it was exciting to participate in the development of our position in the North Sea, especially the Ekofisk project offshore Norway. There have been several booms and busts over the decades; however, the restructuring of the industry over the past 10 to 20 years has been challenging and rewarding. We have done just about every type of investment and financial transaction a company could do to respond to the business environment and create stockholder value.

Investor: The big one was merging Phillips and Conoco.

Mulva: The business environments change and all companies consider organic and inorganic investments and transactions to grow their companies. We believed it was important to merge to create a larger and stronger company to compete internationally for multibillion-dollar opportunities. M&A transactions take a great deal of time and relationship development is important.

Investor: Then industry fundamentals changed again, and you decided to split up the integrated company.

Mulva: It was our belief that the environment requiring integration had changed and the E&P and downstream businesses were becoming different businesses requiring more focus and discipline to compete and grow against companies like Enterprise and Kinder Morgan.

With the split, each business could be more focused, pursue growth and create greater shareholder value. Further, the shareholder likes pure-play E&P and downstream companies.

Investor: So shrinking to grow makes sense?

Mulva: It is always an issue of capital allocation. A company should invest in its best opportunities and then provide a consistent and growing return to its shareholders. A strong balance sheet is always necessary to invest during the down periods, as well as take advantage of unforeseen M&A opportunities. The competitive environment is intense with the development of national oil companies and independents’ capabilities.

Investor: You are a director on several boards. What are the biggest concerns directors face today?

Mulva: Strategic formulation is a must. What do you want the company to look like in five to 10 years? What investment, technology and people resources are required to accomplish this? Second, succession planning and people development are most important. And, capital allocation to investment and return to the shareholder must always be considered. From a corporate governance aspect, always listen and consider the needs of the shareholders.

Investor: What advice have you received that stands out to you?

Mulva: Work very hard at what you are asked to do. Be a team player and never compromise your principles. Listen well and surround yourself with people better than you. Pay attention to detail; however, always watch the greater picture.

Investor: Competition is a big issue.

Mulva: The business environment will only get more competitive with the emergence of NOCs and larger independents. Energy policy constrains opportunities for international oil companies, so it is very important that U.S. energy policy not constrain the new opportunities in North America to use new technology to develop expanded unconventional oil and gas resources.