NEW YORK: Elliott Investment Management has taken a US$1bil stake in Phillips 66 and is urging the US oil refiner and pipeline operator to revamp its board to boost lagging performance.

The activist investment firm in a letter to the Houston energy company’s board on Wednesday said Phillips 66’s stock, recently trading at around US$118 per share, could hit US$200 with improvements. It said management had laid out sensible performance targets but could use help achieving its full potential.

Phillips 66 has lagged its US refining rivals at a time when fuel demand and margins have soared for the industry. Its second-quarter earnings missed Wall Street estimates, but executives have laid out a plan to boost returns by cutting costs and assets. It may sell or spin off US$3bil in assets next year, executives said.

Phillips 66 chief executive Mark Lashier acknowledged discussions with Elliott but did not say whether the company was open to adding two Elliott-recommended directors to its board.

Phillips 66 welcomes “their perspectives and the perspectives of other shareholders on our strategy and actions we are taking to drive long-term sustainable growth and value creation”, Lashier said in a statement. “We remain committed to acting in the best interests of our shareholders.”

 - Reuters