Sunoco has screened its operations, is shedding nonperforming ones, and buffing the others in hopes that the sun will shine on future profits. It operates three refineries, with a total processing capacity of 675,000 barrels of crude oil a day, and it has 5,400 miles of oil and 2,200 miles of refined products pipelines and more than 40 product terminals. More than half of its crude oil is sourced from West Africa. It markets its Sunoco gasoline through more than 4,920 retail outlets (including Ultra Service Centers and APlus convenience stores) in 23 states. Sunoco produces lubricants and mines coal for coke processing. In 2011 the company exited its chemicals business and planned to exit the refining business.
Sunoco's decision to sell or idle its refining operations is part of a larger strategic review aimed at jettisoning high-cost units while maximizing the potential of its retail and logistics business.
Some of Sunoco's pipeline, terminal, and storage assets are held through publicly traded Sunoco Logistics Partners, which is 32% controlled by Sunoco unit Sunoco Partners.
In 2010 the company posted higher revenues thanks to stronger oil and refined product prices and increased demand. Income was also up strongly as the result of higher margins, lower expenses, and lower provisions for asset write-downs.
The company's Sunoco Chemicals unit, which produced phenol and polypropylene, sold off most of its operations in 2010 and 2011. To raise cash to pay down debt, in 2010 Sunoco Chemicals sold its polypropylene business to Brazilian-based Braskem S.A. in a $350 million stock transaction. In 2011 the company sold its 170,000-barrel-per-day Toledo, Ohio, refinery to PBF Holding for $400 million. It also sold a Philadelphia chemical plant to Honeywell International for $85 million as part of its strategy of selling noncore assets.
Later that year Sunoco exited its chemicals business by selling off the last of its standalone chemical complexes, a phenol manufacturing plant, to Haverhill Chemicals (an affiliate of private equity firm Goradia Capital) for $106.5 million.
In 2011 it also spun off its coke business as SunCoke Energy, for about $186 million. Suncor retained 80% of the unit following the IPO but divested this stock in early 2012.
In the last five years Sunoco has implemented its Retail Portfolio Management (RPM) program, which was created to decrease investment in outlets leased or owned by the company while retaining fuel sales to those locations through long-term contracts. In 2009, as part of rationalizing and streamlining its refining business in the light of a weakened global economy and the oversupply of petroleum products, the company sold its 85,000-barrels-per-day Tulsa, Oklahoma, refinery to regional player Holly Corporation, and shut down its Westville, New Jersey, refinery. Sunoco also sold its retail heating oil and propane business to Superior Plus for $86 million. These moves, along with slumping demand and lower oil prices, saw the company's revenues drop sharply in 2009.
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