Bloomberg reported Feb. 26 that Chevon Corp. is open to buying out its partner, Phillips 66, in their Chevron Phillips Chemical Co. joint venture.
Citing unnamed sources, the media company reported that it's not clear if Phillips 66 is open to selling its 50 percent stake in the JV that makes polyethylene, PE pipe and other chemicals.
The report comes after the activist investor group Elliott Investment Management L.P. went public earlier in February with its push for changes at Phillips 66, including advocating for the oil company to sell its stake in CP Chem.
"Phillips should also sell its interest in CPChem, an asset that we believe would likely attract significant interest from its existing JV partner or other potential buyers," Elliot wrote in a Feb. 11 public letter it released as part of the campaign.
Elliot said CP Chem is "at the low end of the global ethylene cost curve" and estimated that Phillips 66's stake in the joint venture could be sold for about $15 billion.
"CP Chem deserves a premium valuation to public peers Dow and LyondellBasell due to exclusively low-cost facilities and no disadvantaged European facilities," Elliot said in an investor presentation it released with its campaign.
Bloomberg said that Chevron has been interested in buying out the Phillips 66 share but it said that no talks were underway. It said the two companies have right-of-refusal over each other's stakes.
Phillips and Chevron officials contacted by Plastics News declined to comment.