Houston-based Phillips 66 close out a “disappointing” quarter and year after its quarterly profit fell 75 percent from 2015.
Phillips 66’s refining business lost $95 million in the first quarter, but luckily their profits in the chemical and specialty products market compensated for the loss.
Their quarterly profit was a mere $163 million versus $650 million in earnings at the end of 2015. For 2016 in its entirety, Phillips 66 reported a $1.56 billion profit compared to $4.23 billion in 2015.
In 2016 oil prices grew and low gasoline prices lagged behind, leading U.S refiners to struggle with low or non-existent profit margins on fuel products. This year is expected to greatly improve as fuel prices are likely to increase for much of 2017.
Phillips Chairman and Chief Executive Greg Garland warned the 20 percent border-adjusted tax proposed by House leaders and President Trump could increase gasoline prices by as much as 40 cents a gallon due to refiners’ reliance on heavier crude oil from Canada, Mexico, Venezuela and others.
In the fourth quarter Phillips 66 was able to bring its new liquified petroleum gas export terminal in Freeport online allowing the company to ship propane and butane worldwide.
Phillips 66 boasted about major projects that are to be offered online this year, such as Chevron Phillips’ massive petrochemical expansion being finished later this year in Baytown and Old Ocean.
Phillips 66 owns a 25 percent stake in the controversial Dakota Access Pipeline project led by Dallas-based Energy Transfer Partners.
Despite the pipeline project having led to protests and hundreds of arrests, more than 95 percent is complete and expected to be finished by mid-2017 after receiving a final approval from the U.S Army Corps of Engineers, said the company.
In December, Phillips 66 spoke of plans to cut its capital spending by 25 percent this year, taking a more conservative approach as the energy sector pulls out of the two-year oil bust.
Article written by HEI contributor Lydia Ezeakor.