(Recasts; adds shareholder, investment banker comment, background)
By Euan Rocha and Nicole Mordant
Oct 6 (Reuters) - Freeport-McMoRan Inc, under pressure from activist shareholder Carl Icahn and weak commodity prices, said on Tuesday it is slashing its board size and exploring a return to its roots as a copper-focused mining company.
Freeport, the biggest listed U.S. copper producer, said it is looking at separating its oil and gas business from its mining operations - potentially unraveling an expensive oil and gas acquisition made in 2013 that has proved unpopular with shareholders.
Splitting the Phoenix-based company could be done through a spin-off of the oil and gas business to shareholders, Freeport said. It repeated that it was also considering joint ventures or an initial public offering for the business.
Freeport's shares rose 4.1 percent to $11.65 in New York.
Splitting up the company "is definitely what shareholders want," said Adrian Day, chief executive of Maryland-based Adrian Day Asset Management, which owns shares in Freeport.
"As a copper company it is a world-leading copper company. It is definitely not a world-leading oil and gas company. They should focus on what they are doing best," Day said.
Freeport's energy unit includes assets in the Deepwater Gulf of Mexico, onshore and offshore assets in California and in the Haynesville natural gas shale formation, along with other natural gas assets in Louisiana.
Icahn, who owned 8.8 percent of Freeport as of Sept. 22, revealed his stake in the company in August and took aim at its spending, capital structure and executive compensation.
The company said it has cut the size of its board from sixteen to nine members, with five of those departing joining a board focused on the oil and gas unit.
The separation of the oil and gas segment would leave Freeport with mainly copper and gold mining assets. Roughly 60 percent of Freeport's $21 billion of revenue in 2014 came from copper, with about 20 percent from oil.
Freeport's big foray into oil and gas came in 2013 with the acquisitions of Plains Exploration and McMoRan Exploration for $9 billion - moves that were big contributors to the company's heavy debt load of $20.9 billion. Since the purchase, oil prices have slid some 50 percent.
The acquisition also raised eyebrows because McMoRan's largest individual shareholder and chief executive, James Moffett, was also the chairman of Freeport.
Freeport agreed in January to pay $137.5 million to resolve a shareholder lawsuit alleging the acquisitions were overpriced and tainted.
Finding partners for its oil and gas assets in today's weak energy market could be tough.
"Their asset base is not one that a lot of people are looking to grab," said one Houston-based investment banker.
"California has been a poison pill. Deepwater Gulf of Mexico has been a capital sucking endeavor," he said, referring to tough regulations in the U.S. state.
At the same time, copper prices have slumped over 28 percent in the last two years, hurt by slowing demand from world's top consumer of the metal, China.
Last week Icahn told Reuters that he was very bullish on the prospects of the copper business, saying "copper prices in the next few years will rise again. There is a very delicate balance between supply and demand. And right now, there is a little too much supply."
Freeport said it is still considering an initial public offering for the oil and gas business, which filed for one in June.
Additional reporting by Mike Stone and Jennifer Ablan in New York and Amrutha Gayathri in Bengaluru; With additional writing by Jeffrey Hodgson; Editing by Meredith Mazzilli and Christian Plumb