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SUN TO DOWNSIZE ITS TULSA OPERATIONS

 SUN TO DOWNSIZE ITS TULSA OPERATIONS
 TULSA, Okla., Aug. 24 /PRNewswire/ -- Citing poor refining economics


in the Midcontinent and the increasingly significant costs necessary to comply with upcoming environmental regulations, Sun Company (NYSE: SUN) today announced a major reconfiguration and downsizing of its Tulsa refining and marketing operations.
 The decision was made following a yearlong study of strategic options for Sun's Tulsa system.
 Under the reconfigured Tulsa operation, Sun will focus on its profitable lubricants and wax business. Branded gasoline marketing, now carried out under the Sunoco brand, will be phased out in areas supplied from the Tulsa Refinery -- largely Oklahoma, Iowa and Missouri. Wholesale fuels marketing activities will also be significantly reduced.
 The changes, scheduled to occur later this year, will eliminate approximately 200 of the current 490 jobs at the refinery. However, the company said its crude acquisition business and crude pipeline systems will not be affected and its credit card center in downtown Tulsa will be retained. These operations employ approximately 250 people. "Today's environmental regulations are causing U.S. refiners to either incur significant costs or to realign or close their operations," said Robert H. Campbell, chairman and chief executive officer of Sun. "In our case, the prospective investment of more than $150 million over the next five years, primarily for environmental purposes, was too staggering to maintain our current fuels operation, given the poor level of profitability in our Tulsa system and the refining industry in general. We examined numerous options, including outright sale of the refinery, joint venture, and closure, and believe we arrived at the best choice, given the impact on all constituents."
 He said that full lubricant production of approximately 9,000 barrels a day will be maintained and that the lube blending and packaging operation adjacent to the refinery will also continue. "The lubricants business has historically been very attractive for us, and we intend to remain a major player in this business," Campbell said.
 Production of intermediate naphtha and gas oil feedstocks will be transported to the company's refinery in Toledo, Ohio, for processing into finished fuels and chemicals, Campbell said. Continued cyclohexane manufacture at Tulsa is still under consideration. "By reconfiguring our refinery to concentrate on lubricant manufacturing, we will improve the profitability of our Oklahoma operations," Campbell said. "This will keep our Tulsa facility in operation and preserve more than half the current refinery jobs." He added that displaced employees will be eligible for severance programs and some may be offered a transfer to other Sun facilities.
 "Sun has had a long association with Tulsa," he commented. "We wanted to continue that relationship, and in light of the economic and regulatory realities that this industry is facing, I believe we've come up with the best solution."
 Campbell said Sun plans to take a third quarter write-off of between $60 million and $70 million after-tax as a result of the Tulsa reconfiguration and downsizing. He noted that the company had earlier announced a positive $115 million net income benefit to be recognized in the third quarter from settlement of claims with Iran scheduled for payment in the fourth quarter.
 Sun Company, headquartered in Philadelphia, is an energy company with interests in U.S. and Canadian petroleum refining and marketing, U.S. coal and coke production, synthetic crude oil production in Canada, and crude oil and natural gas exploration and production outside the United States. Branded marketing is carried out under the Sunoco brand in the United States and Canada and also under the Atlantic brand in the United States. Sun Company trades on the New York Stock Exchange and other stock exchanges with the symbol "SUN."
 /delval/
 -0- 8/24/92
 /CONTACT: Bud Davis or Lynne Butterworth (media), 918-586-7200, or Tim Hughes (investors), 215-977-6544, all of Sun Co./
 (SUN) CO: Sun Company Incorporated ST: Pennsylvania, Oklahoma, Iowa, Missouri, Ohio IN: OIL SU:


MP -- PH001 -- 2428 08/24/92 08:00 EDT
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Publication:PR Newswire
Date:Aug 24, 1992
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