Big name in refining branches out profitably
WHEN Houston’s Phillips 66 splintered from ConocoPhillips in 2012, the company was known for its oil refining and retail gasoline sales. Now, Phillips 66 also is one of the country’s fastest-growing petrochemical and pipeline companies.
The stock market value of Phillips 66 has skyrocketed from $20 billion in 2012 to more than $55 billion at the beginning of June. Over the past year or so, the company has completed major chemical, pipeline and port projects, as well as improved profit margins for gasoline and diesel refining. Energy analysts describe Phillips 66 as a moneymaking machine.
“We are a high-performing organization,” Phillips 66 chairman and CEO Greg Garland said in May at the company’s annual meeting. “During 2017, we achieved major milestones, completed growth projects, and the momentum has continued into 2018.”
This all contributed to Phillips 66 ranking fifth in the Chronicle 100 list of top-performing Houston companies. Phillips 66 led Chronicle 100 companies in annual revenue, generating nearly $90 billion in 2017, a 26 percent jump from 2016. The company earned a $5.1 billion profit last year, compared with $1.6 billion in 2016.
Phillips 66’s stock price rose 20 percent in 2017, and in the first five months of 2018, shares were up more than 16 percent. Part of that growth involves higher oil prices and the spread between European and U.S. oil prices.
Brent crude, the European benchmark, is about $10 a barrel higher than the U.S. benchmark, West Texas Intermediate. That lets Phillips sell gasoline at lower prices in foreign markets and earn bigger profits from exports.
In April, the company’s joint venture with Chevron Corp., Chevron Phillips Chemical Co., completed a massive petrochemical expansion in the Houston area at its Baytown and Sweeny hubs.
To capitalize on the oil boom in West Texas, Phillips 66 and its associated subsidiary Phillips 66 Partners business recently opted to build the Gray Oak Pipeline to carry crude from the Permian Basin to markets in Corpus Christi, Sweeny and Freeport.
Phillips 66 is sharply expanding its Beaumont storage terminal and finishing its Bayou Bridge Pipeline to funnel oil from Beaumont to a refining hub in St. James, La.