Sunoco Inc., the Philadelphia oil refiner, said today it may sell its chemicals business after the operation's performance was hurt by rising crude-oil costs, Bloomberg News reported.
Placing the business in a joint venture is another option that's being considered, the company said in a presentation to analysts in Philadelphia. Chemicals contributed $28 million to Sunoco's net income, or about 3 percent of the corporate total, in the first nine months of this year compared with $43 million in all of 2006 and $94 million in 2005.
In a statement to the Securities and Exchange Commission about today's presentation, Sunoco also said it expects "considerable supply growth" for the types of "sweet" crude oil the company can use at its refineries.
That supply - to rise to an estimated 17.2 million barrels per day in 2009 fron the current 14.7 million barrels - will come from OPEC and non-OPEC nations, Sunoco said.
The statement said the company's capital improvement strategy was to "maintain spending discipline and keep projects in manageable scope." It noted that the company spent $525 million to expand capacity and provide environmental upgrades at a refinery unit in Philadelphia. In 2008, Sunoco said, that will boost net income by $85 million. A similar project is planned for the company's Marcus Hook refinery.
Shares of Sunoco were up $1.20 this morning at $64.89 in New York Stock Exchange trading.