(Click here for previous CSP Daily News coverage of Sunoco's strategy shift to focus on retail and logistics.)
Other peers, including Valero Energy Corp., have followed in shutting down or selling refineries.
Elsenhans boosted Sunoco to the top of the list of major U.S. oil and gas companies in returns this year as the stock gained 53%. She took charge of the second-largest U.S. independent refiner in 2008, just as fuel demand slumped the most in 27 years, and immediately started trimming costs.
Now analysts say she may have gone too far, after agreeing to sell or close three of the company's five refineries.
"When I look at the remaining business, there's not much left," Philip Weiss, an analyst at Argus Research, New York, told the news agency.
The daughter of an Exxon Mobil Corp. employee and a 28-year veteran of Royal Dutch Shell Plc, Elsenhans froze pension benefits, fired employees and got rid of a corporate jet. She cut operating costs by 37%. After planned sales, Sunoco will have about half the 910,000 barrels a day of refining capacity it did in 2007, when the unit generated 82% of net income, according to the report.
The stripped-down company may not generate enough cash to meet future environmental regulations or cover damages if there were an accident at one of its refineries, Weiss added.
Finding new sources of profit may be more difficult after Elsenhans completes all her planned asset sales, Chi Chow, an analyst at Macquarie Capital USA Inc., Denver, told Bloomberg. "This is a refining company that may not even own refineries at the end of the day," he said.
A "smaller, more nimble" Sunoco will rely more on its gas stations, pipelines and terminals to make money, Stephen Lehner, a managing director at Mount Kellett Capital Management LP, New York, told the news agency. "But not necessarily the place where she can create the most value."
Sunoco's "focal points" will be its pipelines and terminals, Elsenhans said in a September 15 presentation to investors in New York. By investing in pipelines and terminals, the company is betting that the variety of fuels will grow with new government mandates, spurring demand for the infrastructure to store and transport them, said Chow.
Earlier this month, Sunoco said it would buy 25 gas stations in New York State for an undisclosed amount. (Click here for previous CSP Daily News coverage.)
Between 2007 and 2009, U.S. demand for petroleum products declined by 1.91 million barrels a day, the most since the two- year period ending 1981, according to the report, citing U.S. Department of Energy (DOE) data. To end losses, Sunoco was the first to say it would shut a U.S. refinery. A month later, Valero Energy Corp., the largest U.S. independent refiner, and Western Refining Inc. said they would do the same.
"She kind of got ahead of the curve of actions that competitors have taken ever since," Robert Darnall, who served on Sunoco's board from 2000 until May 2010, told Bloomberg.
The sales and cuts, which included eliminating about 750 jobs, have helped to more than triple Sunoco's cash pile to $1.13 billion as of September 30, from $327 million in 2008, the report said.
Sunoco is a leading transportation fuel provider, with operations located primarily in the East Coast and Midwest regions of the United States. The company operates more than 4,800 branded retail locations that market transportation fuels and convenience store merchandise in 23 states. This retail network is principally supplied by Sunoco-owned refineries.
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