A California jury ordered Phillips 66 to pay $604.9 million in damages to Propel Fuels after finding Phillips 66 guilty of stealing trade secrets under the guise of a potential acquisition and using them to start a competing renewable-fuel business.
The incident reportedly dates back to 2017 when Phillips 66 offered to acquire Propel Fuels, which makes low-carbon renewable fuels, to expand its renewable fuel business in California. However, after gaining hold of Propel's sensitive information, Phillips suddenly pulled out of the deal and started selling its renewable energy fuel, Reuters reported.
"Phillips 66 is making a multibillion-dollar bet on the California renewable fuel market, premised on Propel's trade secrets," Propel said in the suit, per Reuters. "Prior to receiving Propel's confidential information, Phillips 66 had not only sold no renewable fuel, it also knew nothing about the business."
The lawsuit, filed on February 16, 2022, alleged that Philips 66 stole confidential data, proprietary strategies and business intelligence developed by Propel over 13 years at a cost to Propel of more than $200 million.
The Oakland-based court reiterated Propel Fuel's claims that Phillips 66 used deceitful tactics to steal its proprietary technology. Reuters reported that Phillips 66 was accused of gaining an unfair competitive advantage in the renewable energy sector by exploiting Propel's trust.
Propel's spokesperson confirmed the verdict, while Phillips 66 expressed disappointment and vowed to explore all legal options.
Meanwhile, Phillips 66 announced plans to close its Los Angeles-area refinery by the end of 2025 due to market concerns. The closure of refinery, which accounts for approximately 8% of California's refining capacity, will impact about 600 employees and 300 contractors.
"With the long-term sustainability of our Los Angeles Refinery uncertain and affected by market dynamics, we are working with leading land development firms to evaluate the future use of our unique and strategically located properties near the Port of Los Angeles," CEO Mark Lashier said in a statement.
The business is still dedicated to operating in California and backs the state's efforts to keep gasoline supply sufficient. Five percent of the state's refining capacity is accounted for by another refinery run by Phillips 66 close to San Francisco, AP reported.
The company will supply gasoline from sources inside and outside its refining network as well as renewable diesel and sustainable aviation fuels from its Rodeo Renewable Energy Complex in the San Francisco Bay area.
Phillips 66 also announced Monday an agreement to sell its 49% stake in Coop Mineraloel AG to its Swiss joint venture partner for approximately $1.24 billion.
