Commitment to Disciplined Capital
Allocation
Phillips 66 (NYSE: PSX), a diversified energy manufacturing and
logistics company, announces its 2021 capital budget of $1.7
billion, which includes $0.3 billion at Phillips 66 Partners.
“Our 2021 capital budget is supported by our diversified
portfolio, strong financial position and capital discipline,” said
Greg Garland, chairman and CEO of Phillips 66. “We continue to
focus on reducing capital expenditures as market conditions remain
challenged. We are prioritizing completion of in-progress projects,
as well as advancing our investments in renewable fuels. Phillips
66 is committed to financial flexibility, enabled by our balance
sheet and strong investment grade credit ratings. We continue to
execute our strategy with a focus on disciplined capital allocation
and long-term value creation for our shareholders, including a
secure, competitive, growing dividend.”
In Midstream, the company plans to invest $610 million,
including $300 million of Phillips 66 Partners adjusted capital
spending. The budget is directed toward completing near-term
committed and optimization projects, focusing on pipeline
operations and progressing construction of Sweeny Frac 4 and the
C2G Pipeline. In addition, the Midstream budget includes sustaining
capital to enhance asset integrity and reliability.
The Refining capital budget includes $521 million of sustaining
capital for reliability, safety and environmental projects. The
Refining budget will also include $255 million to fund high-return,
quick-payout projects to enhance margins by improving clean product
yields and reducing feedstock costs, as well as investments to
competitively position the company for a lower carbon future. The
Refining budget includes pre-construction engineering and design
costs related to the company’s plans to reconfigure its San
Francisco Refinery in Rodeo, California, to produce renewable
fuels. Upon expected completion in early 2024, the facility would
have over 50,000 barrels per day, or 800 million gallons per year,
of renewable fuel production capacity, making it one of the world’s
largest facilities of its kind. The conversion is expected to
reduce the facility’s greenhouse gas emissions by 50% and help
California meet its low carbon objectives.
The Marketing and Specialties budget primarily reflects the
development and improvement of our international retail sites.
The Corporate and Other capital budget will primarily fund
digital transformation projects.
Phillips 66’s proportionate share of capital spending by joint
ventures Chevron Phillips Chemical Company LLC (CPChem), WRB
Refining LP (WRB) and DCP Midstream, LLC (DCP Midstream) is
expected to be $707 million. Capital spending by CPChem and DCP
Midstream is expected to be self-funded.
CPChem’s growth capital will fund expansion of its normal alpha
olefins production, optimization and debottleneck opportunities in
the olefins and polyolefins chains, as well as continuing
development of world-scale petrochemicals projects in the U.S. Gulf
Coast and Qatar.
WRB’s capital spending will be directed to sustaining projects,
crude flexibility and distillate yield enhancement.
Millions of Dollars
Sustaining
Growth
Capital
Capital
Capital
Program
Adjusted Capital Program1
Midstream
Phillips 66
$
160
150
310
Phillips 66 Partners1
135
165
300
295
315
610
Chemicals
-
-
-
Refining
521
255
776
Marketing and Specialties
65
51
116
Corporate and Other2
166
-
166
Phillips 66 Consolidated3
1,047
621
1,668
DCP Midstream
30
25
55
CPChem
196
214
410
WRB
84
158
242
Selected Equity Affiliates
310
397
707
Total Adjusted Capital Program
$
1,357
1,018
2,375
1) - Phillips 66 Partners adjusted capital
spending excludes $5 million of growth capital expected to be cash
funded by joint venture partners.
2) - Excludes non-cash finance leases of
$32 million.
3) - Total consolidated capital spending
inclusive of cash funded by joint venture partners is expected to
be $1,673 million in 2021.
About Phillips 66
Phillips 66 is a diversified energy manufacturing and logistics
company. With a portfolio of Midstream, Chemicals, Refining, and
Marketing and Specialties businesses, the company processes,
transports, stores and markets fuels and products globally.
Phillips 66 Partners, the company’s master limited partnership, is
integral to the portfolio. Headquartered in Houston, the company
has 14,500 employees committed to safety and operating excellence.
Phillips 66 had $54 billion of assets as of Sept. 30, 2020. For
more information, visit www.phillips66.com or follow us on Twitter
@Phillips66Co.
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE
“SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This news release contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbors
created thereby. Words and phrases such as “is anticipated,” “is
estimated,” “is expected,” “is planned,” “is scheduled,” “is
targeted,” “believes,” “continues,” “intends,” “will,” “would,”
“objectives,” “goals,” “projects,” “efforts,” “strategies” and
similar expressions are used to identify such forward-looking
statements. However, the absence of these words does not mean that
a statement is not forward-looking. Forward-looking statements
included in this news release are based on management’s
expectations, estimates and projections as of the date they are
made. These statements are not guarantees of future performance and
you should not unduly rely on them as they involve certain risks,
uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from
what is expressed or forecast in such forward-looking statements.
Factors that could cause actual results or events to differ
materially from those described in the forward-looking statements
include: the continuing effects of the COVID-19 pandemic and its
negative impact on commercial activity and demand for refined
petroleum products; the inability to timely obtain or maintain
permits necessary for capital projects; changes to worldwide
government policies relating to renewable fuels and greenhouse gas
emissions that adversely affect programs like the renewable fuel
standards program, low carbon fuel standards and tax credits for
biofuels; fluctuations in NGL, crude oil, and natural gas prices,
and petrochemical and refining margins; unexpected changes in costs
for constructing, modifying or operating our facilities; unexpected
difficulties in manufacturing, refining or transporting our
products; the level and success of drilling and production volumes
around our Midstream assets; risks and uncertainties with respect
to the actions of actual or potential competitive suppliers and
transporters of refined petroleum products, renewable fuels or
specialty products; lack of, or disruptions in, adequate and
reliable transportation for our NGL, crude oil, natural gas, and
refined products; potential liability from litigation or for
remedial actions, including removal and reclamation obligations
under environmental regulations; failure to complete construction
of capital projects on time and within budget; the inability to
comply with governmental regulations or make capital expenditures
to maintain compliance; limited access to capital or significantly
higher cost of capital related to illiquidity or uncertainty in the
domestic or international financial markets; potential disruption
of our operations due to accidents, weather events, including as a
result of climate change, terrorism or cyberattacks; general
domestic and international economic and political developments
including armed hostilities, expropriation of assets, and other
political, economic or diplomatic developments, including those
caused by public health issues and international monetary
conditions and exchange controls; changes in governmental policies
relating to NGL, crude oil, natural gas, refined petroleum
products, or renewable fuels pricing, regulation or taxation,
including exports; changes in estimates or projections used to
assess fair value of intangible assets, goodwill and property and
equipment and/or strategic decisions with respect to our asset
portfolio that cause impairment charges; investments required, or
reduced demand for products, as a result of environmental rules and
regulations; changes in tax, environmental and other laws and
regulations (including alternative energy mandates); the operation,
financing and distribution decisions of equity affiliates we do not
control; the impact of adverse market conditions or other similar
risks to those identified herein affecting PSXP, as well as the
ability of PSXP to successfully execute its growth plans; and other
economic, business, competitive and/or regulatory factors affecting
Phillips 66’s businesses generally as set forth in our filings with
the Securities and Exchange Commission. Phillips 66 is under no
obligation (and expressly disclaims any such obligation) to update
or alter its forward-looking statements, whether as a result of new
information, future events or otherwise.
Use of Non-GAAP Financial Information —This news release
uses the terms “adjusted capital spending” and “adjusted capital
program.” These are non-GAAP financial measures that are derived by
reducing the company’s budgeted capital spending by that portion
expected to be cash funded by joint venture partners, thereby
demonstrating the amount of capital spending attributable to
Phillips 66. The disaggregation of capital spending between
sustaining and growth is not a distinction recognized under
generally accepted accounting principles in the United States. The
company provides such disaggregated information to demonstrate
management’s return expectations with respect to capital
spending.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201214005096/en/
Jeff Dietert (investors) 832-765-2297 jeff.dietert@p66.com
Shannon Holy (investors) 832-765-2297 shannon.m.holy@p66.com
Thaddeus Herrick (media) 855-841-2368
thaddeus.f.herrick@p66.com
Phillips 66 (NYSE:PSX)
Historical Stock Chart
From Apr 2024 to May 2024
Phillips 66 (NYSE:PSX)
Historical Stock Chart
From May 2023 to May 2024