By Erwin Seba
HOUSTON (Reuters) -Phillips 66 on Tuesday said Mark Lashier, its chief operating officer, will take over the fourth largest U.S. oil refiner from Chief Executive Greg Garland on July 1.
Garland, who has led the refining, petrochemical and pipeline company since it spun off from ConocoPhillips 10 years ago, will step down as CEO but remain executive chairman until his retirement in 2024, according to a company statement.
Lashier, a chemical engineer who joined the company three decades ago in its chemicals group, was promoted to president and COO a year ago after having run Chevron Phillips Chemical Co, its joint venture with Chevron Corp , since 2017.
Garland has viewed refining as a mature business and focused on growing its energy pipeline, chemicals and carving out a role in electric-vehicle battery components. Last year, it paid about $150 million for a 16% stake in Novonix Ltd, an Australian supplier of materials for lithium-ion batteries.
Garland “created a leading diversified energy manufacturing and logistics company, while investing for the future and delivering strong financial returns,” said Glen Tilton, Philips 66’s lead independent director.
The Houston company’s non-refining investments have delivered strong shareholder returns but more recently its shares have lagged larger rivals that benefited from soaring fuel margins as motor fuels demand emerged from pandemic lockdowns.
Lashier is likely to continue Garland’s strategy of diversifying into biofuels, hydrogen and battery component. But he must show he can match shareholder returns of rivals Marathon Petroleum Corp and Valero Energy lifted returns by spinning off retail arms and jumping into renewable diesel, analysts said.
Phillips 66 on Tuesday traded at $81.97, up 13% year-to-date, compared to 34% year-to-date increases at Marathon and Valero, and a nearly 96% gain at PBF Energy.
“Lashier’s challenge is to improve the company’s valuation,” said Matthew Blair, analyst at investment firm Tudor Pickering Holt & Co. “He will face questions about the valuation and what he can do to improve stock price performance and capitalize on the potential valuation” of its non-refining operations.
(Reporting by Erwin Seba; Editing by Gary McWilliams and Tom Hogue)
