Phillips 66 reported fourth-quarter 2015 earnings of $650 million, a steep decline from earnings of $1.58 billion in the third quarter due in large part to lower realized refining margins. Its adjusted earnings, excluding special items of $60 million, were $710 million.
Refining adjusted earnings were $376 million, down from $1.05 billion in the third quarter. The company largely attributed the drop to a 35% decline in global market cracks compared with the third quarter.
Chemicals adjusted earnings were $182 million, compared with $272 million in the third quarter. Chevron Phillips Chemical Co. LLC’s olefins and polyolefins business contributed $181 million to Phillips 66’s chemicals earnings, representing a decrease of $80 million compared with the prior quarter largely due to reduced margins, as well as decreased equity earnings.
The company also reported that overall progress on CPChem’s US Gulf Coast Petrochemicals Project is now approaching 70% completion, with startup expected in mid-2017 (OGJ Online, June 18, 2014). The project consists of an ethane cracker and related polyethylene facilities that will increase CPChem’s US ethylene and polyethylene capacity by more than 40%.
Phillips 66’s midstream fourth-quarter adjusted earnings were $42 million, a decrease of $49 million from the third quarter. Marketing and specialties adjusted earnings were $227 million, compared with $344 million in the third quarter.
Phillips 66 in October reported a planned 2016 capital budget of $3.6 billion, excluding Phillips 66 Partners’ capital program, representing a $1-billion reduction from the 2015 budget (OGJ Online, Oct. 12, 2015).