Phillips 66 recently announced its plans to generate $3 billion by selling non-core assets. While the company has not disclosed the specific assets it intends to offload, industry insiders in the refining sector have suggested that it may consider offering its interests in the Wood River, Illinois, and Borger, Texas, refineries to partner Cenovus Energy.

These facilities are jointly owned by Cenovus and Phillips 66, with the latter holding operating rights. According to Cenovus CEO Alex Pourbaix, the company prefers to operate refineries in which it has an ownership stake. As evidence, Cenovus previously acquired BP's share in the 155,000 b/d Toledo, Ohio, refinery.

The two joint ventures have played a critical role in accommodating the substantial volumes of western Canadian crude brought to market by Cenovus in Alberta. The Wood River refinery, with a capacity of 180,000 b/d, primarily processes heavy sour crude, while the Borger plant, with a capacity of 92,000 b/d, utilizes various North American crude blends.

Based on the Toledo deal, in which Cenovus paid $370 million for a 50% stake, industry insiders estimate that purchasing Phillips 66's 50% stake in the Wood River refinery could cost between $400 million and $500 million.

However, refining sources caution that the Toledo deal included a multi-year supply agreement with BP, which likely impacted the sales price. Despite this uncertainty, Phillips 66 officials hinted during a recent conference call discussing third-quarter financial results that they were open to considering potential sales, recognizing that the company possesses high-performing assets that could be more valuable to others.

Phillips 66 stated that a $1 per barrel discount in Western Canadian Select (WCS) oil corresponds to approximately $100 million of annual EBITDA. Nonetheless, the company has not provided further information on the asset disposal process upon request.


With ambitions to generate $3 billion through asset sales, Phillips 66 is poised to assess strategic options and potentially divest non-core assets. The Wood River and Borger refineries have emerged as potential candidates, as partner Cenovus Energy has expressed interest in operating refineries with an ownership stake. While the asset disposal process remains under wraps, Phillips 66's recognition of the value its high-performing assets hold opens doors for speculative discussions and potential partnerships within the refining industry.

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