Sunoco to sell Ohio refinery, shed 175 jobs

Sunoco Inc. said Thursday that it would sell its Ohio refinery and cut corporate staff by 175 employees - mostly in Philadelphia - to reflect the firm's shrinking operations.

The fuel company will sell its Toledo refinery for $400 million to PBF Energy, the Connecticut firm that earlier this year acquired Valero Energy Corp.'s refineries in Delaware City, Del., and in Paulsboro, Gloucester County.

The Toledo plant was Sunoco's first refinery, purchased in 1894 by Joseph Newton Pew and Edward O. Emerson, eight years after they began prospecting for oil in northern Ohio. But in a modern environment of poor production margins, it will become the third refinery Sunoco has shed since chief executive officer Lynn Elsenhans took the company's helm in 2008.

Sunoco sold its Tulsa, Okla., refinery in June 2009, and last year closed its Eagle Point refinery in West Deptford.

Along with the sale this year of its chemicals unit and the impending separation of its coke-manufacturing subsidiary, Sunoco's main production operations will now be concentrated at its two Delaware River refineries, in Philadelphia and Marcus Hook. It also operates an ethanol plant near Syracuse, N.Y.

The refinery sale is consistent with Elsenhans' statements that she wants the company's priorities to be retail fuel marketing and its pipeline network, which offer steadier profits than the cyclical refining business.

"Selling the Toledo refinery will enable us to direct resources and management focus toward growing the logistics and retail businesses where we have competitive advantages," Elsenhans said in a statement.

The smaller company will require a smaller workforce, and Sunoco will cut 175 people, mostly in Philadelphia, said Thomas P. Golembeski, Sunoco's spokesman.

He said the Engineering and Technology and Refining Excellence units will be consolidated into a division called Operations Excellence.

"We have to match our staffing to the company's needs and long-term business strategy," Golembeski said.

Sunoco employs about 10,000 people, including 6,000 at its convenience stories.

The Toledo refinery processes 170,000 barrels of crude a day. Sunoco will continue to buy its output to supply its Midwest outlets.

The Toledo refinery contributed about $29 million in profits for the nine months ended Sept. 30, compared with a loss of $23 million for the first three quarters of 2009.

The buyer of the Toledo refinery, PBF, is backed by private-equity firms Blackstone Group L.P. and First Reserve Corp.

After acquiring Valero's Delaware and New Jersey refineries, PBF largely retained the employees.

Elsenhans, in a statement, said PBF also plans to keep most of the 475 employees at the Toledo refinery.