Stocks to watch on Tuesday: CE, IEX, SONC >>> READ MORE

Sunoco in Talks to Transfer Oil Refinery

Will surrender operation and financial obligation to Carlyle Group


Petroleum company Sunoco (NYSE:SUN) said Monday that it is negotiating the transfer of its Philadelphia oil refinery operation to the Carlyle Group.

The company said the talks could lead to a joint venture with Carlyle to run the 330,000-barrel-per-day refinery.

In exchange for the oil refinery assets, Sunoco would receive a non-operating minority interest in the joint venture. The company also would relinquish any further financial commitments to the refinery’s operation. Carlyle would hold the majority stake in the joint venture and provide any financial investment needed by the refinery.

Talks over the potential joint venture continue, but no other financial details of the transaction were announced.

The United Steel Workers union, which represents workers at the refinery, indicated that it would work with “any willing party” that would keep the Philadelphia facility in operation.

The Wall Street Journal noted that the refinery had been losing money for Sunoco “for years.” The company, which is leaving the oil refining business, suspended operations at its other Pennsylvania refinery in December.

Sunoco said it would continue operations at the Philadelphia refinery through July of this year due to the ongoing talks. If the talks fail to produce a joint venture, the refinery could be shut down by August.

Article printed from InvestorPlace Media,

©2017 InvestorPlace Media, LLC