Shares of oil refiner Sunoco Inc. (
NYSE: SUN) are up over a percent in morning trade after the company announced that CEO Lynn Elsenhans is stepping down on March 1 and will be replaced by chief financial officer Brian MacDonald as part of a shift in its business away from refining. The 55-year-old former Royal Dutch Shell (NYSE: RD) executive is widely credited with cost cutting measures that resulted in closing refineries, firing workers and selling or spinning off its chemical and coke-making businesses.
Separately the company also reported a pretax $660 million fourth-quarter loss compared with a pretax gain of $119 million a year earlier. Excluding special items, mostly related to its refinery business, the company said it would have a pretax loss of $48 million.
“She’s accomplished her task,” said Mike Leger, president of Turner, Mason & Co., a Dallas-based energy consultant. “Lynn set out to leave behind refining and that’s apparently what the Sunoco board blessed.”
The company is poised to join a peer group that includes Kinder Morgan Inc. and Oneok, which focus entirely on pipelines and trade at a premium to refiners, Paul Sankey, an analyst with Deutsche Bank AG, had said in a note to clients Jan. 9. The reconstituted Sunoco may be a takeover candidate for a larger pipeline operator, or it could trade at values of as much as $55 a share, Sankey had said.
“She’s being treated better going out the door than the people who have given 20, 30 or 40 years to this company,” said Jim Savage, president of the union that represents 600 workers at Sunoco’s Philadelphia refinery. “She dismantled this company and she did what she was brought here to do.”
“Brian has played a key role in Sunoco's transformation and I have full confidence that the company will be in good hands under Brian's leadership. To ensure a seamless transition, I will remain Chairman of Sunoco and Sunoco Logistics until the Sunoco Annual Meeting of Shareholders in May of this year. After that, Brian will become Chairman of both companies” out going CEO Lynn Elsenhans said on the management change.
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