By the OGJ Online Staff
HOUSTON, Jan. 9 -- Sunoco Inc. said Wednesday that it has slated $517 million for capital spending in 2002.
Chairman and CEO John Drosdick told financial analysts that for 2001, "Despite market volatility in several of our businesses and a very weak fourth-quarter market environment, we should generate operating earnings of approximately $400 million and, as in 2000, have operating earnings of near $5/share for the year.
"Record yearly results from our retail marketing operations and our Midcontinent refining centers and record production levels across our refining system largely offset margin declines in our core northeast refining area and continued weakness in chemicals."
Drosdick said the 2001 acquisition of Aristech Chemical Corp. expanded Sunoco's chemicals business, it bought 473 service stations from Coastal Corp., and it opened the first 13 sites under an agreement with Wal-Mart Corp. It plans to open 50 more stations at Wal-Mart locations this year.
He said the sale of the 34,000-b/d Yabucoa, PR, refinery and other lubricants business assets generated $125 million in cash in 2001.
"In logistics, we are currently in registration to implement a master limited partnership, Sunoco Logistics Partners LP, and hope to complete the offering shortly. And as we have taken these steps, we have continued to significantly reduce our shares outstanding, repurchasing approximately 10.7 million shares in 2001."
Drosdick said the weakening economy and record warm temperatures hurt earnings in the fourth quarter. He said refining margins in Sunoco's northeast US system averaged only $1.68/bbl during the quarter, below breakeven levels. The chemicals business continued to operate at cyclically low margin levels and will report a loss.
