PHILADELPHIA -- Sunoco Inc. CEO and president Lynn Elsenhans, in her first major initiative since taking the reins at the refiner-marketer, said that to meet future challenges and ensure that it continues to increase shareholder value, the company is embarking on an effort to review its portfolio of assets, improve business processes and establish a more competitive cost structure. Sunoco has engaged McKinsey Inc., a management consulting firm, to assist in this process, she added.
"As the review of assets and business processes proceeds, we will continue to focus on getting the most value [image-nocss] out of our assets. Sunoco also remains committed to being a good neighbor and operating all of our facilities in a safe, reliable and environmentally sound manner," Elsenhans said.
The review is going to begin immediately and will take "as long as necessary," Sunoco spokespersonThomas Golembeskitold Dow Jones.
Sunoco has a reputation for being among the most conservative players in the refining industry, and has not acquired or divested assets as rapidly as competitors like Valero Energy Corp., the report added.
Prior to Elsenhans' appointment, Sunoco said it had been approached by potential bidders with interest in its Tulsa, Okla. refinery. The McKinsey review will include all of Sunoco's assets, including the Tulsa plant, according to Golembeski. An update on the progress of specific initiatives, including the potential Tulsa sale should be expected by the end of the year, he said.
"For the last several years with refining being so strong, our focus has been on reliability and utilization; now that the market's changed we're shifting our focus a bit," Golembeski said. The company's new focus will be upon building a stronger organization. "We're looking at reducing our cost structure, improving our business processes, and we plan to use benchmarking to help us get there," he said. Benchmarking standards are used across the refining industry to measure performance of assets.
Sunoco also has announced several changes in the roles and responsibilities of key members of its senior leadership team. Vincent J. Kelley, senior vice president of refining and supply, has assumed responsibility for crude oil and refined product supply, trading, sales and transportation. He has been responsible for Sunoco's refining operations since February 2006.
Michael J. Hennigan, senior vice president of business improvement, will lead a new company-wide effort to improve Sunoco's cost structure and business process efficiency. Prior to assuming this new role, he had been responsible for crude oil and refined product supply, trading, sales and transportation.
Bruce G. Fischer, senior vice president of strategy and portfolio, has assumed responsibility for strategic planning and business development. He will focus on developing strategic options for Sunoco's businesses and executing portfolio changes, including joint ventures, mergers, acquisitions, and divestitures. Prior to assuming this new role, he had been responsible for Sunoco's chemicals business.
Thomas W. Hofmann, senior vice president and CFO, has elected to retire, effective December 1. He was elected to his current position in January 1998. If a successor has not been named at the time of his retirement, an interim appointment will be announced.
Sunoco's CEO and president Lynn Elsenhans said, "These changes reflect Sunoco's ongoing commitment to build a better, stronger organization as we face unprecedented challenges in the refining industry and the overall economy. Volatility in crude oil markets, changing demand for gasoline and distillate products, and new refining capacity being added throughout the world mean that Sunoco has to take steps now to strengthen its position for long-term growth."
Philadelphia-based Sunoco is a leading manufacturer and marketer of petroleum and petrochemical products. With 910,000 barrels per day of refining capacity, approximately 4,700 retail sites selling gasoline and convenience items, approximately 5,500 miles of crude oil and refined product owned and operated pipelines and 38 product terminals, Sunoco is one of the largest independent refiner-marketers in the United States.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.