US Sunoco reports strong refining results during sales process

03 November 2011 22:19  [Source: ICIS news]

HOUSTON (ICIS)--Third quarter refining results for Sunoco were some of the best in two years as the company looks to exit the refining business, the US refiner said during its third-quarter earnings call on Thursday

The refining and supply segment of the company reported pre-tax loss of $17m in income for the third quarter, which was an improvement over a loss of $70m at this time in 2010.

“As long as we own and operate the refineries, keeping some reliability will be a priority,” said Lynn Elsenhasn, Sunoco chief executive.

Sunoco’s 178,000 bbl/day Marcus Hook and 335,000 bbl/day Philadelphia refineries in Pennsylvania are currently for sale and set to shut down in July 2012 if no sale is completed.

The fourth-quarter of 2010 saw a loss of $17m, and refining during the second-quarter of 2010 showed a net gain of $138m.

For the third quarter of 2011, the company had an operating rate of about 90%. This was the third best in two years, topped by 94% in the third quarter of 2010 and 92% in the second quarter of 2010.

Refining margins during the quarter were $4.89/bbl, among the top two since the start of 2010. These remain relatively low on a nationwide average.

“We expect volatility at relatively low margins to continue for some time in our region,” Elsenhans said.

Because the east coast processes Brent crude, which has averaged about a $20/bbl premium to West Texas Intermediate (WTI) crude, margins cannot compete with the cheaper refining margins in the midwest or on the US Gulf.

Net production for sale, however, lagged behind at 487,000 bbl/day, the second worst production results since the start of 2010.

“The refining market and environment continued to be difficult through October,” senior vice president and CFO Brian MacDonald said.

By: Sheena Martin
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