Phillips 66 announced this week a dramatically lower 2021 capital budget of $1.7 billion.
It reflects a nearly 43% drop from the 2020 estimated budget as the company is like other energy firms—trying to recover from an energy market devastated by the COVID-19 pandemic.
It remains unclear how the new budget will affect the company’s operations in Bartlesville where it has a major research facility.
But Phillips plans to devote $521 million to continue with refining operations as well as $255 million for its San Francisco Refinery to make 50,000 barrels a day of renewable fuel once it becomes online in 2024.
The conversion of the refinery is expected to reduce the facility’s greenhouse gas emissions by 50% and help California meet its low carbon objectives.
The company will also invest $610 million in Midstream operations. Phillips 66 Partners will get $300 million. Another $160 million will be used for midstream sustaining operations and $150 million for growth.
“We continue to focus on reducing capital expenditures as market conditions remain challenged,” said Greg Garland, chairman and CEO of Phillips 66.
In announcing the new budget, the company was also careful to point out some of its millions would go for environmental projects “as well as investments to competitively position the company for a lower carbon future.”
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