Phillips 66 mulls sale of European, Asian refineries
By ALISON SIDER
Phillips 66 would entertain offers for some of its refineries in Europe and Asia as it focuses on growing returns in its US refining system, an executive told analysts Thursday.
Larry Ziemba, executive vice president for refining, project development and procurement, said that, for the right price the company would consider selling a 71,000 bpd refinery in Cork, Ireland, and its joint venture stakes in refineries in Malaysia and Germany.
"They're really not strategic," Mr. Ziemba said of the refineries.
The company's 47% stake in Malaysia's Maleka refinery is a holdover from Phillips 66's days as the refining arm of ConocoPhillips, which had upstream operations in Malaysia. Now, "it might be worth more to Petronas or someone else than it is to us," Mr. Ziemba said.
Mr. Ziemba said the company likes the cash generated by its 18.5% stake in the Mineraloelraffinerie Oberrhein GmbH refinery in southwest Germany, but said the refinery is not key to the company's portfolio. He said the refinery in Ireland is "not sophisticated."
Most Phillips 66's refining capacity is located in the US, where the company is looking to take full advantage of booming production of relatively inexpensive oil. Mr. Ziemba said the share of "advantaged" crude-oil that is cheaper than the European Brent benchmark- has grown from 52% of the crude Phillips 66 ran in 2011, to 70% by the end of 2012.
"Ultimately, our objective is to push all the Brent crudes out of our system," Mr. Ziemba said.
The challenge has been getting crude from areas such as North Dakota that are not yet hooked in to existing pipelines. Many coastal refineries have turned to rail companies and their existing routes to connect to the new sources of crude.
Earlier this year, Phillips 66 announced that it signed a five-year contract for 50,000 bpd of crude oil from North Dakota to be delivered by rail to its Bayway refinery in Linden, N.J. The company is awaiting permits to build a rail rack to supplement that, Mr. Ziemba said.
Now Phillips 66 wants to do the same thing at its Ferndale, Wash., refinery, where the company is working with third parties to bring Bakken crude. Mr. Ziemba said the company is considering building a rail rack at Ferndale, which would also allow the refinery take rail delivery of Canadian crude that could then be sent to refineries in California by ship.
Dow Jones Newswires
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