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Phillips 66 to focus on chemical, pipeline units, less on fuels - CEO

04.09.2012  |  HP News Services

The ConocoPhillips downstream spinoff will focus on growing its chemical and midstream segments at the expense of refining due to the weak outlook for fuel demand.



Phillips 66 will focus on growing its chemical and midstream segments at the expense of its fuel production business because of the weak outlook for fuel demand, the company's incoming CEO said Monday.

Phillips 66, the refining arm of oil major ConocoPhillips that will become a stand-alone company after April 30, will shift its long-term capital spending to its Chevron Phillips Chemical production and DCP Midstream segments.

Chevron Phillips is a 50-50 joint venture with Chevron. DCP is a partnership with ConocoPhillips and Spectra Energy.

Phillips 66 will roughly double its 2012 capital expenditure budget for its chemical business to $500 million, while its spending on its refining business will grow from just under $1 billion, Greg Garland, a ConocoPhillips executive vice president who will head Phillips 66, said.

Capex for its midstream segment will more than double to $1 billion, Garland said during a conference call with investors.

In the long term, Phillips 66 will split 50% of its capital expenditure budget evenly on the chemical and midstream businesses, up from 11% and 5%, respectively in 2011, Garland said.

Spending on its traditional fuel segment will shrink from 84% of total capital budget in 2011 to 50%, he said.

The shift comes as the long-term outlook for gasoline sales in the US lags because of increased vehicle fuel efficiency and greater use of alternative fuels. High oil prices are also eroding fuel refiners' profit margins.

The outlook is better for chemical segment, where raw material prices are falling because of increased natural gas liquids production, Garland said.

Increased oil and gas production in the US will also boost pipeline business, he said.

Returns on the chemical business "are still significantly better than what we're seeing in the refining and marketing space," Garland said.

Dow Jones Newswires

Cover photo courtesy of John Lloyd via Flickr

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Henry C. Ihejirikah

I read your article on Philip 66 plans to grow its chemical business. Would you be kind enough to forward my CV to the appropriate channel in Philip 66 (Chemicals).


Personal Data:

Name: Henry Chukwunenye Ihejirikah.

Date of Birth: 29th of October, 73.

Marital Status: Married with two sons.

Position: Engineered Chemistry project supervisor.
Weatherford Nigeria limited,
(Engineered Chemistry)
Plot 37, Trans Amadi Industrial Layout,
Port Harcourt.

Qualification: B.Sc. Applied Chemistry, University Of Jos, Jos, Nigeria. 1997.

Communication Skill: Fluent in written and spoken English.

Contact Mobile Phone: +2348034070419, +2348090966925
Contact Email address: tuzeengineering@yahoo.com

Career Summary:
 Weatherford Engineered Chemistry production chemicals business development in Nigeria, and management of customers’ contacts.
 Clariant oilfield services production chemicals business development in Nigeria, and management of customer contacts.
 Experience in many oil and gas producing regions in Nigeria Niger-Delta and Angola.
 CECA S.A. France/ Matrix Petrochem Production Chemical business development in Nigeria.
 Mid-West Custom Chemical MCC, USA/CHEMTECH production chemical business development in Nigeria.
 ZONETECH Lafayette/ CISCON Geological Services – ZONETECH production chemical business development in Nigeria.
 Commercial and technical capabilities in most aspects of the oilfield production chemical activities, including knowledge of stimulation(matrix acidizing), drilling fluids, petroleum/chemical waste control and management services, flow assurance, crude dehydration, produced water treatment, scale control, corrosion control, etc…
 Formulation of demulsifier and multi purpose chemical products.
 Bottle Test/Field Test/Selection of ideal production chemicals for specific problems and installations. Monitoring performance of treatment periodically. Adaptation of treatments to changing operation conditions.
 Corrosion control including chemical corrosion control, cathodic protection, remediation of corroded flowlines using pull through corrosion resistant spoolable lines.
 Over Ten (10) years oil and gas experience.

Career History:

2008 – till date –Weatherford Engineered Chemistry Project Supervisor.
2004 – 2008 – Senior Sales/Service Engineer, Clariant Oilfield Services/NGCOS.
2003 – 2004 – Treatment Engineer, CECA S.A. France/MATRIX Petrochem.
2002 – 2003 – Environmental technologist, THE INITIATES LIMITED, NIGERIA.
2000 - 2002 – Field Chemist, DRILLING DYNAMICS.
1999 – 2000 – Field Engineer, CISCON Geological Services/ ZONETECH Chemicals.
1998 – 1999 – Treatment Engineer, MID-WEST Custom Chemicals/ CHEMTECH.
1997 – 1998 – National Youth Service; Laboratory Analyst, SPDC, Warri.

Course(s) attained: HTS Consultants / Clariant Oilfield Production Chemicals & Microbiology, Dyce, Aberdeen.
SandAid/Control training – Weatherfor

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