MOSCOW (MRC) -- U.S. oil refiner Phillips 66 said on Wednesday its 2020 capital spending budget could fall as much as 10% below this year’s plans, which include USD300 million for a West Coast marketing campaign, said Reuters.
Executives at the fourth-largest U.S. refiner by capacity said in a presentation to Wall Street analysts that next year’s outlays would range from USD3 billion to USD3.5 billion, compared with the estimated USD3.3 billion to USD3.5 billion this year.
"Phillips 66 has a consistent, proven strategy to create value for shareholders,” Chief Executive Greg Garland said in New York. “Our strategic priorities of growth, returns and distributions are supported by a strong foundation of operating excellence and a high-performing organization."
The 2019 capital budget was boosted in part by USD300 million to pay for a retail-fuels joint marketing campaign with an undisclosed partner on the West Coast, executives said. Phillips markets fuels under the Phillips 66 and Union 76 brands.
“The transaction has not yet been finalized,” said Phillips 66 spokesman Dennis Nuss. “We can confirm additional details once the transaction is closed."
At the high end of next year’s spending, the company would have “USD1.5 billion to USD2.5 billion for share repurchases, ahead of our expectations of USD1.2 billion,” Credit Suisse analysts said in a note on Wednesday. “Another strong dividend increase for 2020 indicated (we expect a 10% hike)."
During the presentation, which was webcast, analysts questioned whether the capital budget fully reflected spending for major oil pipeline and other projects being constructed.
Garland said two major pipelines being developed were financed by shippers. Phillips 66 discloses its financing arrangements to credit rating agencies, he added, saying: “We’re completely transparent."
Phillips 66’s budget will include work on gasoline-producing fluidic catalytic cracking units (FCCU) at its Sweeny, Texas, and Ponca City, Oklahoma, refineries in 2020.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.
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