I wonder if Lashier sees chemical returns improving before yet two more new massive petchem plants come online? CPChem (i.e. PSX and Chevron…) have wasted billions of shareholder capital in an apparent race to the bottom with Exxon, each trying to outdo the other by building additional large-scale petchem capacity even as the previous plants the have completed have yet to return anything near what shareholders were told and expected (!). I can’t believe these CEOs get paid such massive compensation packages only to be such poor stewards of shareholder capital! I mean just because the U.S. has very attractive feedstock metrics, why go completely over-board on the matter? But I guess when those executive comp packages typically take “volume growth” metrics into account, they make out pretty good – even if shareholders don’t. I mean despite the huge allocation of capital to previous petchem capacity expansions, the EBITDA from CPChem was actually *lower* due to global over-capacity and awful margins. But as if that wasn’t enough of a clue, CPChem decides to FID two more huge plans, one on the Gulf Coast and one in Qatar. I mean are you kidding? Clearly PSX would have been much better off over the past few years by spending significantly less capital simply bringing its refineries up to snuff and having a much cleaner line-of-sight into improving refining margins as compared to apparently choosing to go head-to-head with Exxon on who can build the most petchem capacity the fastest. Just ridiculous imho.
Image and article originally from seekingalpha.com. Read the original article here.