Phillips 66
Petroleum RefiningFounded 1917- Updated June 2026
Reviewed by Swet Parvadiya
Last reviewed: June 2026
CorpDigest
Phillips 66
Company History
Founded 1917 in Houston, Texas
Last reviewed: 2026-06-09T00:00:00Z · By Swet Parvadiya
Frank Phillips and his brother L.E. Drilled their first oil well in Oklahoma in 1903 and found nothing. The second well was also dry. So were the next ones. In 1905, on the verge of giving up, they struck oil. They drilled 81 consecutive producing wells before the string ended. That run of early success funded the ambitions that eventually became Phillips Petroleum Company, formally established in 1917.
The 1927 discovery of massive natural gas reserves in the Texas Panhandle proved to be the inflection point. Natural gas liquids extracted from that formation gave Phillips the raw materials for a chemicals and fuels business that stretched beyond simple crude production. The company developed Marlex polyethylene in 1940 — a material that found its way into hula hoops, milk jugs, and eventually the global plastics supply chain. The energy company was also, quietly, a materials science company.
T. Boone Pickens targeted Phillips in a 1985 hostile takeover attempt. The defense succeeded, but the financial engineering required to repel the bid left Phillips significantly leveraged and committed to an aggressive asset sale program. That episode accelerated the strategic rationalization that eventually led to the 2002 merger with Conoco — creating ConocoPhillips, at the time the third-largest oil company in the United States.
The 2012 spin-off was a deliberate unbundling. ConocoPhillips separated its upstream exploration and production business from the downstream refining and midstream operations, creating Phillips 66 as an independent pure-play. The logic was that different investor bases value exploration upside differently from refining cash flows, and that separation would allow each business to optimize its capital structure for its own economics.
Frank Phillips, along with his brother L.E. Phillips, founded the Phillips Petroleum Company in Bartlesville, Oklahoma, in 1917, establishing a regional refiner that would evolve into a global downstream and midstream powerhouse. He approached the problem of energy distribution with a deep understanding of industrial engineering and commercial strategy, recognizing that the internal combustion engine would define the 20th century, and that a company without refining and marketing capabilities was merely a price-taker in a volatile commodity market. His early success was driven by his ability to navigate the complex political and logistical landscape of the American Midwest, leveraging the technical expertise of his workforce to secure access to the vast oil and natural gas reserves of the Texas Panhandle and the Mid-Continent region. Phillips instilled a culture of long-term strategic planning, technical excellence, and operational discipline in the company, creating a corporate DNA that remains visible in the company's willingness to invest in massive, long-lead-time mega-projects and its deep integration across the hydrocarbon value chain. His visionary leadership and unwavering focus on vertical integration laid the foundation for a century of growth and adaptation, transforming a wildcat drilling operation into a global leader in hydrocarbon conversion and midstream logistics.
Frank and L.E. Phillips incorporate the company in Bartlesville, Oklahoma, initiating the construction of the first refinery and establishing the foundation for a vertically integrated energy enterprise.
The company discovers massive natural gas reserves in the Texas Panhandle, pioneering the extraction of natural gasoline and carbon black, and establishing a dominant position in the nascent natural gas liquids and petrochemical markets.
The company develops the revolutionary Marlex brand of polyethylene, a high-performance plastic that transforms the global packaging and manufacturing industries and establishes the foundation for its modern chemicals segment.
The company successfully defends against a massive hostile takeover attempt by corporate raider T. Boone Pickens, resulting in a massive stock repurchase program and a strategic restructuring that forces the company to focus on its core, high-return assets.
Phillips Petroleum merges with Conoco in a $35 billion transaction to form ConocoPhillips, creating the third-largest integrated oil company in the world and combining the upstream strength of Conoco with the downstream dominance of Phillips.
ConocoPhillips executes a massive tax-free spin-off of its downstream, midstream, and chemicals assets into the newly formed Phillips 66, creating a pure-play downstream specialist with a market capitalization of over $15 billion.
The company acquires a controlling interest in DCP Midstream Partners, instantly scaling its midstream footprint and establishing a dominant position in the Permian Basin natural gas liquids value chain.
Mark Lashier is appointed CEO of Phillips 66, initiating a comprehensive strategic review that leads to the full integration of DCP Midstream and the aggressive expansion of the company's renewable fuels and circular economy portfolio.
The company completes the full integration of DCP Midstream, making it the largest natural gas liquids fractionator in the United States with over 115,000 barrels per day of capacity and over 65,000 miles of gathering pipelines.
The company reports $159.7 billion in consolidated revenues and $4.3 billion in net income, while continuing the massive, multi-billion-dollar conversion of its Rodeo facility in California into a world-scale renewable diesel and sustainable aviation fuel production hub.
The company acquired DCP Midstream Partners to instantly scale its midstream footprint and establish a dominant position in the Permian Basin natural gas liquids value chain, making it the largest NGL fractionator in the United States. This acquisition was a strategic masterstroke that vertically integrated the company's refining and chemical feedstock supply, securing low-cost NGLs for its CPChem joint venture and providing fee-based cash flows that perfectly offset the cyclical nature of the refining margins.
Phillips Petroleum merged with Conoco in a $35 billion transaction to form ConocoPhillips, creating the third-largest integrated oil company in the world and combining the upstream strength of Conoco with the downstream dominance of Phillips. The merger was driven by the belief that the integrated model would provide a natural hedge against commodity price volatility and create massive synergies in the global refining and marketing markets.
Frank Phillips, a barber-turned-bond-salesman from Iowa, drilled his first oil well in 1905 in the Osage Nation reservation in northern Oklahoma. With his brother L.E. Phillips and partner Charles Anderson, Frank acquired drilling leases on Indian Territory land and hit oil at the Anna Anderson well, named for the eight-year-old Delaware girl whose family owned the allotment. The strike turned into 81 consecutive producing wells without a dry hole, a record that funded the brothers' expansion across the Osage and Cherokee strips. Frank and L.E. organized the Phillips Petroleum Company on June 13, 1917 in Bartlesville, Oklahoma, just as the United States entered World War I and military fuel demand surged. Initial capitalization was $3 million and the company immediately began consolidating local producers, refiners, and pipelines. The Phillips brothers' Discovery Well at the Burbank Field in 1920 produced one of the largest oil discoveries in Oklahoma history and made Phillips a major regional producer. The company integrated forward into refining by building the Borger refinery in Texas (1927) and downstream into branded retail by opening the first Phillips 66 service station in Wichita, Kansas on November 19, 1927. The Phillips 66 brand name was selected after a Phillips automobile reportedly hit 66 miles per hour on the just-completed US Route 66 during fuel testing, lending the new gasoline its memorable octane-based marketing identity.
Marlex was Phillips Petroleum's brand name for high-density polyethylene (HDPE), a thermoplastic developed by Phillips chemists J. Paul Hogan and Robert Banks in 1951 at the company's research lab in Bartlesville, Oklahoma. The breakthrough used a chromium-based catalyst to produce a stronger, higher-melting polyethylene than the low-density variants available since 1933. Phillips received the first commercial HDPE patent in March 1953. Marlex commercialized in 1954 with a plant at the Adams Terminal in Texas. The hula-hoop craze of 1958 to 1959 generated massive Marlex demand, with manufacturers producing approximately 100 million hula hoops in 18 months, with most made from Marlex. The product line expanded into household containers, pipes, automotive parts, milk jugs, packaging films, and ultimately the foundation of modern plastics infrastructure. Phillips licensed the catalyst technology globally and built a major petrochemicals franchise alongside the oil and gas business. The Marlex platform led to Phillips operating an integrated olefins-polyolefins-derivatives chain that survives today as CPChem, the 50/50 joint venture with Chevron formed in 2000. Marlex remained a Phillips brand through the ConocoPhillips era and continued under the CPChem ownership. The 1951 catalyst discovery is one of the most commercially successful chemistry breakthroughs of the 20th century, and current global HDPE demand exceeds 50 million tonnes per year.
Corporate raider T. Boone Pickens, CEO of Mesa Petroleum, launched a hostile takeover bid for Phillips Petroleum in December 1984, acquiring approximately 5.7% of Phillips shares and offering $60 per share for the remaining stock. Phillips management led by chairman William Douce viewed the bid as opportunistic and undervaluing the company. The defense package, announced in December 1984 and revised in early 1985, included a stock buyback that paid existing shareholders $50 cash plus debt securities, leveraging the company with approximately $4.5 billion of new debt to fund the repurchase. The recapitalization reduced Phillips equity float by approximately 45% and concentrated ownership among existing public shareholders. Phillips also adopted poison-pill provisions and golden parachute employment contracts. The defensive measures forced Pickens to walk away in March 1985 after collecting a profit of approximately $89 million on the shares already acquired. The fight became one of the formative episodes of the 1980s corporate raider era and inspired similar defensive recapitalizations at Unocal, Union Oil, and Walt Disney. Phillips emerged with significantly higher leverage but independent. The debt overhang constrained capital expenditure through the late 1980s and into the 1990s. Phillips eventually merged with Conoco in August 2002 to form ConocoPhillips, in part because the standalone scale was insufficient to compete with ExxonMobil and BP-Amoco mega-mergers. The Pickens attempt is often cited as the trigger for the eventual loss of Phillips's independence.
Phillips Petroleum merged with Conoco Inc. on August 30, 2002 in a stock-for-stock transaction valued at approximately $15 billion, creating ConocoPhillips as the third-largest US integrated oil major behind ExxonMobil and ChevronTexaco. The combined company had upstream operations across the United States, North Sea, and emerging international plays, downstream refining and marketing through 12 US refineries plus international assets, and the CPChem petrochemicals joint venture with Chevron. James Mulva, former Phillips CEO, led the merged company. ConocoPhillips invested heavily in oil sands, Alaska, and unconventional shale, growing to over 1.8 million boe/d production by 2011. Activist investors led by Jana Partners and supported by Carl Icahn pressured ConocoPhillips to separate upstream from downstream. On April 30, 2012 ConocoPhillips spun off downstream operations as Phillips 66, a separate publicly traded company on the NYSE under ticker PSX, with shareholders receiving one Phillips 66 share for every two ConocoPhillips shares. The new Phillips 66 was a pure-play downstream company combining 12 refineries (approximately 2.2 million bpd capacity), 22,000 miles of pipelines, terminals, the 50% CPChem joint venture, the Phillips 66 and 76 branded gasoline retail network (approximately 7,000 stations), and lubricants. The spin-off framed Phillips 66 explicitly as midstream and chemicals leverage. Greg Garland served as the first CEO from 2012 to 2022, succeeded by Mark Lashier. Phillips 66 has generated stronger total shareholder returns than its upstream sibling ConocoPhillips over much of the past decade.
Phillips 66 in 2018 completed its acquisition of full ownership of DCP Midstream after partnering with Enbridge in the gas processing and natural gas liquids business since 2005, paying $3.8 billion for incremental Enbridge interests. The DCP integration consolidated Phillips 66's midstream position in the Permian, Eagle Ford, and DJ Basin. In 2021 Phillips 66 completed the conversion of its San Francisco refinery near Rodeo, California into a 50,000 bpd renewable diesel plant called Phillips 66 Rodeo Renewed, one of the largest renewable fuel facilities globally, completed and operational by mid-2024. Mark Lashier was named CEO in July 2022, succeeding Greg Garland after a 10-year tenure. In 2023 Phillips 66 completed the full take-private of DCP Midstream by acquiring the public unitholder stake for approximately $3.8 billion, fully consolidating the midstream business. Phillips 66 announced a $14 billion shareholder return program through 2024 combining dividends and buybacks. In 2024 Phillips 66 sold its 25% interest in the Germany retail network (Jet brand) and Switzerland retail (Coop) for approximately $1.6 billion to Energa Capital. The company also closed the Borger Texas chemicals facility and announced refinery rationalization plans. Activist investor Elliott Management disclosed a roughly $2.5 billion stake in late 2024 demanding board changes, midstream separation, and CPChem sale. The activist campaign continues into 2025 with proxy contests scheduled for the annual meeting.