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Within the Midstream space The corporate operates greater than 70,000 miles of pipelines with a fractionation capability of practically 1 million barrels per day and in Refinery space It has 11 refineries with a crude oil capability of 1.8 million barrels per day, which is delivered to nearly 9,000 advertising areas. It is usually increasing its portfolio of renewable fuels, which at present stands at round 50,000 barrels per day.

Supply: Phillips 66

Phillips 66 operates in 5 main segments: The Phase Midstream gives transportation, terminal and processing providers for crude oil, refined petroleum merchandise, pure fuel and pure fuel liquids. The realm Chemical substances produces and markets petrochemicals and plastics worldwide by means of its three way partnership with Chevron Phillips Chemical Firm LLC (CPChem). The realm refinery focuses on changing crude oil into petroleum merchandise corresponding to gasoline and aviation fuels. The section Advertising & Specialties (M&S) markets refined merchandise, together with lubricants and base oils. The section Renewable fuels processes renewable uncooked supplies into merchandise corresponding to renewable diesel and jet gas.

Phillips 66 markets its merchandise below varied manufacturers, together with Phillips 66, Conoco and 76.

The corporate has a big presence within the Permian Basin and operates a community of pipelines and refineries in the USA and Europe. That is the place Trump’s oil cope with Venezuela comes into play, as a result of sooner or later as much as USD 2 billion of heavy oil is to be delivered to the USA and thus to the refineries on the US Gulf Coast, that are additionally operated by Phillips 66.

Strategic (re)orientation

With Paul Singer from the hedge fund Elliott Administration, Phillips 66 has had an activist and reasonably uncomfortable main shareholder on board for a number of years. He criticizes the administration for the below-average profitable efficiency and pushes for adjustments. In his view, the corporate ought to focus totally on its refining actions and Singer is particularly calling for the sale or spin-off of the midstream enterprise in addition to additional divestments of property.

And Singer’s push is already exhibiting outcomes: strategic gross sales of non-core enterprise areas value over USD 5 billion have been made in recent times, together with the fuel station enterprise in Germany and Austria (JET) for USD 1.6 billion. In return, plenty of complementary acquisitions have been made, such because the acquisition of EPIC NGL for USD 2.2 billion. Which means prices have been diminished by an astonishing $1 per barrel since 2022, which has had a constructive impression on money move and margins. Throughout your entire portfolio, Phillips 66 achieved adjusted working earnings (EBITDA) of simply over USD 10 billion. This corresponds to a market capitalization to common EBITDA ratio of round 5 with a market capitalization of round USD 55 billion.

However that does not go far sufficient for Singer; Most just lately, Phillips 66 awarded him two spots on the Board, stuffed with skilled managers of his alternative: Howard Ungerleider has greater than 30 years of senior monetary and operational expertise within the chemical, packaging and specialty supplies industries; he was president and CFO of Dow Inc. and CFO of DowDuPont. And Kevin Meyers has greater than 40 years of expertise within the oil and fuel business and retired from ConocoPhillips in 2010 after serving as senior vice chairman of exploration and manufacturing within the Americas. The brand new board members will change Glenn Tilton and Marna Whittington, who introduced their retirement final 12 months.

Fairly good numbers in instances of upheaval

Within the fourth quarter, Phillips 66 reported earnings per share of $7.17, effectively above expectations, however the consequence was severely distorted by a achieve of about $2 billion from the sale of European operations. Adjusted earnings per share of $2.47 have been primarily flat in comparison with Q3 ($2.52), indicating a steady however not dynamically rising core enterprise.

The quarter was marked by an aggressive restructuring of the portfolio: the corporate raised round $2 billion from the sale of property in Germany and Austria, lowering its debt to $19.7 billion. As well as, the remaining 50% of WRB Refining was acquired and operations on the refinery in Los Angeles have been discontinued. Moreover, the $1.3 billion acquisition of Lindsey Oil Refinery (UK), introduced in January 2026, alerts a shift towards an elevated concentrate on built-in property the place PSX has aggressive benefits.

Chemical substances earnings fell ($19 million vs. $176 million) and have been attributed to decrease margins, suggesting that the “persistent cycle” talked about within the third quarter is worsening or at the least remaining at a low level, failing to assist the diversified income mannequin. As well as, the “Renewable Fuels” section once more posted an adjusted pre-tax lack of USD 19 million, which represents an enchancment over the lack of USD 43 million within the third quarter, however nonetheless continues to weigh on earnings.

Adjusted pre-tax earnings within the Midstream section elevated barely by 3% to $717 million, with report volumes in NGL transportation and fractionation (+22% 12 months over 12 months). This section continues to validate the technique of constructing fee-based, steady money flows to offset fluctuations within the refining enterprise; Right here the consequence improved in comparison with the earlier quarter from USD 430 to 542 million. The acquisition of the remaining 50% of WRB Refining had an instantaneous impression on the figures, however was partially offset by the cessation of gas manufacturing on the Los Angeles refinery. The portfolio is more and more centered on the Central Hall and the Gulf Coast, in keeping with a method to exit from high-cost, high-regulatory areas.