HOUSTON — As Archie Dunham prepares to retire as chairman of ConocoPhillips, he has the satisfaction of having presided over a successful merger that allowed his company to reap the benefits of soaring oil prices.

The $15.1 billion combination of Conoco Inc. and Phillips Petroleum Co. in 2002 formed the nation's third-largest oil company.

"I'm exceedingly proud of what we've created," said Dunham, who led Conoco before the merger. "Now we can compete anywhere in the world. We couldn't do that previously because we weren't quite large enough."

The merger agreement required Dunham, now 65, to be chairman of the ConocoPhillips for two years. He will retire when his time in that role runs out at the end of September. ConocoPhillips CEO Jim Mulva, who was CEO of Phillips, will assume the chairman post.

Dunham, who has spent 38 years in the oil business, could remain a ConocoPhillips director until he's 70. But he's following his own credo that a corporate board should have no more than two insiders — a CEO and a chairman — and only one if the same person fills both roles, as Mulva will.

And, he believes the combined company has achieved its major objectives of selling $4.5 billion in production, refining and marketing assets to rebalance ConocoPhillips' portfolio to two-thirds exploration and production, one-fourth refining and marketing and about 10 percent chemicals. ConocoPhillips has also cut debt to $17 billion from $24 billion since the merger.

That savings helped ConocoPhillips' earnings shoot up 75 percent in the second quarter as oil prices headed toward their current record highs.

Analysts agree with Dunham's upbeat assessment.

"He was obviously part of a merger that created one of the largest integrated oil companies, and if I may say so, one of the most successful," Fadel Gheit, an analyst with Oppenheimer & Co., said of Dunham.

"He recognized that Jim Mulva is the natural leader of the new company. He opted to take the ceremonial post as the statesman, the goodwill ambassador," Gheit said. "Now he's more behind the scenes, not actively running the company, but it goes without saying that he put the plan (for the merger) in motion."

George Gaspar, an analyst with Robert W. Baird & Co., said the combination of Conoco's international exploration expertise and Phillips' strong posture in North America provides a "huge platform" from which to operate.

He said Conoco's presence in Libya gives the combined company an advantage in that country as U.S. oil firms return there. Conoco operated in Libya for more than two decades until President Reagan imposed economic sanctions in 1986. President Bush in April rescinded sanctions after Moammar Ghadafi agreed to abandon weapons of mass destruction.

In addition, Gaspar said ConocoPhillips can set itself up to acquire oil and gas properties in Russia. Mulva met last month with Russian President Vladimir Putin, and told analysts in late July that the company is working on asset transactions, seeking investment opportunities and talking to "a number of companies."

"I think that ConocoPhillips jointly is really prepared to reach out," Gaspar said.

Dunham said he was ecstatic about eventually resuming operations in Libya.

"I pretty much personally led the charge for our industry beginning in January 1996 to oppose the United States sanctions," Dunham said. "I felt that as a matter of public policy and foreign policy we need as many different sources of supply globally that we can capture."

Willingness to operate in Libya and other countries with poor human-rights records can raise ire from human rights groups. The State Department said in its most recent human rights report that Libya's "human rights record remained poor, and it continued to commit numerous, serious abuses."

Dunham speaks his mind regardless of criticism, said Frank McPherson, retired chairman and CEO of Kerr-McGee Corp. and a longtime ConocoPhillips director.

"As a leader, Archie has always been willing to speak for the whole industry as well as for the company," McPherson said. "Archie is not shy about stating his opinion, even when he knows it will be controversial."

Dunham pocketed the most millions of executives who received financial windfalls from the merger. His total compensation in 2002, including a $16.1 million bonus, $8.8 million for tax payments, various perks and estimated value of stock options, was $57 million — more than twice the $20.7 million Mulva received. The boosted executive pay packages were one-time deals related to the merger.

Such wealth is a far cry from Dunham's small-town upbringing.

Born in 1938 in Durant, Okla., he grew up in nearby Ada, an oil patch town of 15,000 where his father worked for Pure Oil Co. He was the first in his family to go to college, earning a geological and petroleum engineering degree at the University of Oklahoma. He then joined the Marines, later earned a master's degree in business and sought a challenge.

"I nearly went to work for IBM. I decided the management development program at Conoco was about as challenging as boot camp in the Marine Corps," said Dunham, who moved to Houston in 1966 with his wife, Linda, to join the oil company.

Dunham didn't linger in middle management.

In 1981 he helped combat a Seagram Co. Ltd.'s attempted takeover of Conoco, which was blocked when DuPont Co. acquired the oil company. Upon becoming chief executive in 1996, he focused on separating from DuPont. He succeeded two years later as Conoco went public and raised $4.4 billion in what was then the largest initial public offering in U.S. history.

The next step after several acquisitions was its marriage to Phillips, which he says was partly motivated by what the nation went through during the 1970s gas shortages.

Dunham says he won't slow down much. He remains a director for Louisiana-Pacific Corp., Phelps Dodge Corp. and Union Pacific Corp. and the National Association of Manufacturers. But he doesn't seem sad about leaving Conoco in the hands of others.

"I couldn't be more pleased," he said. "The company is well positioned now to be a major force in the industry."