(Reuters) - U.S. refiner Phillips 66 (NYSE:PSX) forecast lower spending in 2024 on Friday, days after Elliott Investment Management sought a revamp of its board to boost lagging performance.
In November, the activist investment firm in a letter revealed a $1 billion stake in Phillips 66 and criticized its refining operations saying management had taken its "eye off the ball" by letting operating expenses soar.
Prior to Elliott's letter, Phillips 66 had unveiled a plan to raise about $3 billion from non-core asset sales and reduce $1 in cost per barrel.
The company forecast its 2024 capital expenditure at $2.2 billion, compared with its estimated 2023 spending of $2.5 billion.
Global demand for fuel has remained stable amid supply cuts by OPEC+ countries led by Saudi Arabia and Russia.
Phillips 66 said it plans to invest $1.1 billion in its refining segment.
The refining outlay includes the conversion of its Rodeo refinery in California to a renewable diesel facility, expected to start operations in the first quarter of 2024.
Several plants in the U.S. are being converted to facilities that can produce cleaner-burning renewable diesel amid Joe Biden's push to move the country towards net zero.
"The 2024 capital budget includes investing in our NGL wellhead-to-market value chain, completing the Rodeo renewable fuels facility and enhancing Refining performance," said CEO Mark Lashier.
It also expects to spend about $1 billion for its joint ventures Chevron (NYSE:CVX) Phillips Chemical and WRB Refining.
"The capital budget is consistent with our plan to return $13 billion to $15 billion to shareholders by year-end 2024," Lashier added.