Sunoco

Sunoco is the leading manufacturer and marketer of petroleum and petrochemical products. With headquarters in Philadelphia, Pennsylvania, Sunoco is one of the largest independent refiner-marketers in the United States. As of December 2007, Sunoco operated five domestic refineries with a total 910,000 barrels per day of crude oil processing capacity. Sunoco owns and operates approximately 5,500 miles of crude oil and refined gasoline products and has 4,700 retail sites selling its gasoline.

Sunoco is a major producer of petrochemicals. The company sells approximately 5 billion pounds of chemicals synthesized from petroleum, mostly intermediates that are used to make fibers, plastics, films, and resins. Through its subsidiary, Sunoco Chemicals, the company produces and sells such petrochemical intermediates as phenol, acetone, nonene, tetramer, alphamethylstyrene, toluene, xylene, and benzene. Sunoco also manufactures over 2.5 million tons of metallurgical-grade coke for consumption by the steel industry. The company is the “operator of, and has equity interest in, a 1.7 million tons-per-year coke making facility in Vitoria, Brazil.”

Sunoco is a global company in terms of its markets: it has over 80 export markets in Europe, the Middle East, Africa, and Australia. Its subsidiaries in Belgium and Japan continue to produce and sell industrial oils and lubricants throughout Europe and Asia, respectively. Sunoco has seen impressive growth over the last few years. Between 2003 and 2007, sales more than doubled from nearly $18 billion to close to $45 billion; during this same period, net income for the company also increased about 2.5 times, from $312 million to $891 million.

Sunoco's first successes depended on developing and exploiting major technological change. By the end of World War II, technological leadership went to other, larger refiners and petrochemical producers. Unlike other oil and chemical companies, Sunoco did not rely ultimately on riding the growing wave of globalization. Foreign operations were, and still are today, of subsidiary importance to the company. Indeed, by the 1990s, Sunoco actually reduced its international presence. For example, Sunoco concentrated the vast bulk of its refining capacity to the United States. The strategy that set the company onto its growth trajectory after the 1970s was in general undertaken in its U.S. operations. However, at the same time, by maintaining a wide-ranging marketing and distribution system for its gasolines, oils, lubricants, and specialty products, Sunoco today has been able to transfer the benefits it receives at home to its commercial network worldwide.

History

Sunoco began its business as the Peoples Natural Gas Company of Pittsburgh, Pennsylvania, providing natural gas for business, commercial, and residential [Page 1520]demand. The founders, Joseph. N. Pew and Edward O. Emerson, looking to expand and diversify, entered the oil business in 1886 by purchasing oil leases in the then-promising oil fields of Pennsylvania and Ohio. In 1890 the company officially became the Sun Oil Company of Ohio. By the 1890s, Sun Oil was “producing, transporting and storing oil as well as refining, shipping, and marketing petroleum products.” By 1895 the company was operating a large refinery in Toledo, Ohio, a consequence of the purchase of the Diamond Oil Company. In 1899 Pew bought out Emerson's interest in the company and became sole head of Sun Oil. Two years later, Pew further extended the company's hold on the country's oil industry by obtaining leases and crude oil in the newly discovered Spindle-top oil field of Texas. With a growing supply of oil now coming from the Southwest, additional refinery capacity had to be secured. Pew purchased 82 acres of land in Marcus Hook, Pennsylvania, as the site for the company's second refinery. The death of Joseph Pew in 1912 ushered in a new era for the company. His two sons took over the reins of power in the company: J. Howard Pew succeeded as president of the company and Joseph N. Pew, Jr., as vice president.

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