Disciplined Capital Allocation to Advance
Strategic Priorities
Phillips 66 (NYSE: PSX) today announced a 2024 capital budget of
$2.2 billion, including $923 million for sustaining capital and
$1.3 billion for growth capital. Excluding joint venture debt
repayments due in 2024, the company’s 2024 capital budget is $2
billion.
“We continue to demonstrate capital discipline in support of our
strategic priorities,” said Mark Lashier, president and CEO of
Phillips 66. “The 2024 capital budget includes investing in our NGL
wellhead-to-market value chain, completing the Rodeo renewable
fuels facility and enhancing Refining performance. In addition, the
capital budget is consistent with our plan to return $13 billion to
$15 billion to shareholders by year-end 2024.”
Lashier added that the sustaining capital budget reflects $300
million of efficiencies as a result of the company’s business
transformation efforts. Phillips 66’s historical average sustaining
capital spend was approximately $1 billion per year prior to
business transformation, and the consolidation of DCP Midstream
adds approximately $200 million in sustaining capital.
In Midstream, the capital budget of $985 million comprises $392
million for sustaining projects and $593 million for growth
projects focused on enhancing the company’s integrated NGL
wellhead-to-market value chain. In addition, growth capital
includes $250 million related to the repayment of the company’s 25%
share of the Bakken Pipeline joint venture’s debt due in 2024.
Phillips 66 plans to invest $1.1 billion in Refining, including
$412 million for sustaining capital. Refining growth capital of
$654 million includes completing the conversion of the San
Francisco Refinery in Rodeo, California, into one of the world’s
largest renewable fuels facilities. Startup of the converted
facility is expected in the first quarter of 2024. The conversion
will reduce emissions from the facility and allow for the
production of lower carbon-intensity transportation fuels. Refining
growth capital will also support high-return, low-capital projects
to enhance market capture.
The Marketing and Specialties capital budget reflects continued
enhancement of the company’s retail network, including energy
transition opportunities.
Corporate and Other capital will primarily fund information
technology projects.
Phillips 66’s proportionate share of capital spending by joint
ventures Chevron Phillips Chemical Company LLC (CPChem) and WRB
Refining LP (WRB) is expected to total $1 billion and be
self-funded.
CPChem’s growth capital will fund the construction of
world-scale petrochemical facilities on the U.S. Gulf Coast and in
Ras Laffan, Qatar, through joint ventures. The facilities have
project financing in place and are expected to start up in
2026.
WRB’s capital spending will be directed to sustaining projects
and enhancing market capture.
Including Phillips 66’s proportionate share of capital spending
associated with joint ventures CPChem and WRB, the company’s total
2024 capital program is projected to be $3.2 billion.
Millions of Dollars
Sustaining
Growth
Capital
Capital
Capital
Program
Capital Program
Midstream1
$
392
593
985
Chemicals
-
-
-
Refining
412
654
1,066
Marketing and Specialties
51
61
112
Corporate and Other
68
-
68
Phillips 66 Consolidated
923
1,308
2,231
CPChem
245
583
828
WRB
114
69
183
Selected Equity Affiliates
359
652
1,011
Total Capital Program
$
1,282
1,960
3,242
1) Midstream growth capital includes $250
million related to the repayment of the company’s 25% share of the
Bakken Pipeline joint venture’s debt due in 2024.
About Phillips 66
Phillips 66 (NYSE: PSX) manufactures, transports and markets
products that drive the global economy. The diversified energy
company’s portfolio includes Midstream, Chemicals, Refining, and
Marketing and Specialties businesses. Headquartered in Houston,
Phillips 66 has employees around the globe who are committed to
safely and reliably providing energy and improving lives while
pursuing a lower-carbon future. For more information, visit
phillips66.com or follow @Phillips66Co on LinkedIn.
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE
“SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
This news release contains forward-looking statements within the
meaning of the federal securities laws. Words such as
“anticipated,” “estimated,” “expected,” “planned,” “scheduled,”
“targeted,” “believe,” “continue,” “intend,” “will,” “would,”
“objective,” “goal,” “project,” “efforts,” “strategies” and similar
expressions that convey the prospective nature of events or
outcomes generally indicate 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: fluctuations in NGL, crude oil,
refined petroleum product and natural gas prices, and refining,
marketing and petrochemical margins; changes in governmental
policies or laws that relate to NGL, crude oil, natural gas,
refined petroleum products, or renewable fuels that regulate
profits, pricing, or taxation, or other regulations that limit or
restrict refining, marketing and midstream operations or restrict
exports; the effects of any widespread public health crisis and its
negative impact on commercial activity and demand for refined
petroleum products; our ability 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 including the renewable
fuel standards program, low carbon fuel standards and tax credits
for biofuels; our ability to achieve the expected benefits of the
integration of DCP Midstream, LP (DCP), including the realization
of synergies; the success of the company’s business transformation
initiatives and the realization of savings and cost reductions from
actions taken in connection therewith; unexpected changes in costs
for constructing, modifying or operating our facilities; our
ability to successfully complete, or any material delay in the
completion of, asset dispositions or acquisitions that we may
pursue; 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; our ability to comply with governmental regulations or make
capital expenditures to maintain compliance with laws; limited
access to capital or significantly higher cost of capital related
to illiquidity or uncertainty in the domestic or international
financial markets, which may also impact our ability to repurchase
shares and declare and pay dividends; potential disruption of our
operations due to accidents, weather events, including as a result
of climate change, acts of terrorism or cyberattacks; general
domestic and international economic and political developments
including armed hostilities (including the Russia-Ukraine war),
expropriation of assets, and other political, economic or
diplomatic developments; international monetary conditions and
exchange controls; 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); political and
societal concerns about climate change that could result in changes
to our business or increase expenditures, including
litigation-related expenses; the operation, financing and
distribution decisions of equity affiliates we do not control; 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 — 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. References in the
release to shareholder distributions refers to the sum of dividends
paid to Phillips 66 stockholders and proceeds used by Phillips 66
to repurchase shares of its common stock.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231207392937/en/
Jeff Dietert (investors) 832-765-2297 jeff.dietert@p66.com
Owen Simpson (investors) 832-765-2297 owen.simpson@p66.com
Thaddeus Herrick (media) 855-841-2368
thaddeus.f.herrick@p66.com
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