Today we had the distinct pleasure of hosting Mark Lashier, Chairman and CEO of Phillips 66. Mark joined Phillips 66 as President and COO in 2021 and assumed the CEO role in July 2022. Prior to that, he served as the President and CEO of Chevron Phillips Chemical Company (CPChem), where he held several senior leadership roles, including Executive Vice President of Olefins and Polyolefins, Senior Vice President of Specialties, Aromatics and Styrenics, and Vice President of Corporate Planning and Development. Mark began his career at Phillips Petroleum and holds a doctorate in Chemical Engineering. Beyond his leadership at Phillips 66, he serves on the Executive Committee of the American Petroleum Institute and is a Board Member of the Greater Houston Partnership and several other nonprofit organizations. Mike, Arjun and I were thrilled to host Mark for this Special Edition to discuss Phillips 66’s recent performance, his strategic vision for the company, insights into today’s energy landscape, and the ongoing debate with Elliott Management.
 
In our discussion, Mark shares background on his career and transition to CEO, his early priority of addressing improvements in Phillip 66’s refining segment, and the cultural transformation to re-instill pride and competitiveness amongst refiners, which involved engaging employees at all levels and investing in strategic capital projects to fix operational bottlenecks and improve reliability and earnings. We discuss Bob Pease’s addition to the board, who was originally nominated through Elliott’s engagement, and how he shifted from being skeptical to supportive of the company’s strategy, execution, and focus on shareholder returns. We explore the history and structure of CPChem, the benefits of Phillips 66’s integrated business model during times of volatility and potential downturns, and the company’s industry-leading safety performance, which ties safety directly to employee compensation. Mark shares his perspective on why maintaining a diversified portfolio across refining, midstream, and chemicals is strategically and financially advantageous, as well as the optimization and regulatory advantages of an integrated structure. We touch on Phillips 66’s strong ROCE versus peers, activist pressure to sell midstream assets for a higher multiple, growth across their midstream business, and broader global trends toward integration rather than asset breakups. Mark highlights the company’s refining performance improvement, the rationale behind merging PSXP and DCP assets, efforts to attract generalist investors back to the energy sector by demonstrating consistent earnings, Phillips 66’s philosophy of keeping assets “for sale every day” to ensure focus on shareholder value, and much more. We greatly appreciate Mark for sharing his candid insights into a complex and highly public debate.
 
As you will hear, we reference a few items in the discussion. Phillip 66’s Investor Relations presentation entitled “Delivering Value & Demonstrating Commitment,” released Monday, April 28, is linked here. Veriten’s COBT episode featuring Doug Terreson is linked here.
 
Thanks to Mark for joining us for an insightful discussion and thanks to you all for your friendship and support!