Phillips 66 (PSX) JP Morgan Energy, Power and Renewables Conference summary

Strategic direction and portfolio optimization

• Focused on value creation through a diversified portfolio: midstream, refining, chemicals, marketing, and specialties.

• Targeting $4 billion EBITDA growth from 2022 base to $14 billion by 2025, with 75% of growth outside refining.

• Recent acquisitions (DCP, Pinnacle) and asset sales (REX pipeline) optimize the business mix and earnings.

• Asset dispositions expected to generate over $3 billion, focusing on non-core, high-value assets.

• Chemicals business remains core due to high returns and integration with midstream; other non-core assets under review.

Operational improvements and cost management

• Refining reliability initiatives have increased crude unit availability to 98% and utilization rates above industry average.

• Market capture improved by over 3% since 2022, with further gains expected in 2024.

• Achieved record clean product yield of 87% in Q4 2023.

• Cost savings program exceeded $1.25 billion, targeting $1.4 billion by end of 2024, mainly from refining.

• Ongoing focus on logistics, freight, and contracting cost reductions to enhance competitiveness.

Market and macroeconomic outlook

• Refining margins softer in 2024 after strong post-COVID years; demand down year-over-year, with diesel lagging and jet fuel strong.

• Lower-income consumers facing economic pressure, impacting gasoline and diesel demand.

• U.S. refiners benefit from cost and logistics advantages versus Asia and Europe, where run cuts are occurring.