Disciplined Capital Allocation; Focus on Lower-Carbon Opportunities

Phillips 66 (NYSE: PSX) today announced its 2022 capital program of $1.9 billion. The plan includes $992 million for sustaining capital and $916 million for growth capital. Approximately 45% of growth capital supports lower-carbon opportunities.

“The 2022 capital program demonstrates our commitment to disciplined capital allocation,” said Greg Garland, Chairman and CEO of Phillips 66. “Our plan for sustaining capital reflects our ongoing focus on operating excellence to ensure the safety and reliability of our operations. We are also investing in returns-focused growth opportunities, including projects that will help us advance a lower-carbon future. In addition to a disciplined capital program, we will continue to prioritize debt reduction and returns to shareholders.”

The Midstream capital plan of $703 million, which includes Phillips 66 Partners, comprises $426 million for growth projects and $277 million for sustaining projects. Growth capital will be directed toward completing construction of Sweeny Frac 4 and repayment of our 25% share of the Bakken Pipeline joint venture’s debt due in 2022. Midstream growth capital also includes Emerging Energy opportunities to advance the company’s lower-carbon efforts.

In Refining, Phillips 66 plans to invest $896 million, with $488 million for reliability, safety and environmental projects. Refining growth capital of $408 million is primarily for the reconfiguration of the San Francisco Refinery in Rodeo, California, as part of the Rodeo Renewed project. Upon expected completion in early 2024, the facility will initially have over 50,000 barrels per day, or 800 million gallons per year, of renewable fuel production capacity, making it one of the world’s largest facilities of its kind. The conversion will reduce emissions from the facility and produce lower-carbon transportation fuels. Refining growth capital will also support opportunities for high-return, low-capital projects.

The Marketing and Specialties capital plan reflects the continued development and enhancement of the company’s retail network, including energy transition opportunities.

Corporate and Other capital will primarily fund digital transformation projects.

Phillips 66’s proportionate share of capital spending by joint ventures Chevron Phillips Chemical Company LLC (CPChem), WRB Refining LP (WRB) and DCP Midstream, LLC (DCP Midstream) is expected to total $1.1 billion and to be self-funded.

CPChem’s growth capital will fund expansion of its normal alpha olefins production, optimization and debottleneck opportunities in the olefins and polyolefins chains, as well as continuing development of world-scale petrochemicals projects in the U.S. Gulf Coast and Qatar.

WRB’s capital spending will be directed to sustaining projects, crude flexibility and enhancing clean product yield.

Including Phillips 66’s proportionate share of capital spending for these large ventures, the company’s total 2022 capital program is projected to be $3.0 billion.

About Phillips 66

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Headquartered in Houston, the company has 14,100 employees committed to safety and operating excellence. Phillips 66 had $56 billion of assets as of Sept. 30, 2021. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

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^{Use of Non-GAAP Financial Information — The disaggregation of capital spending between sustaining and growth is not a distinction recognized under generally accepted accounting principles in the United States. The company provides such disaggregated information to demonstrate management’s return expectations with respect to capital spending.}

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