April 23, 2012:

Sunoco is in exclusive talks with private-equity house Carlyle Group about a joint-venture for its Philadelphia refinery. But that might not be all that comforting to Sunoco investors. Keeping its Philadelphia refinery open through a possible joint venture with Carlyle would quench some of the political heat that rose amid plans to close the plant if it can’t find a buyer.

Carlyle would contribute cash to the venture, hold a majority interest and oversee day-to-day operations of both the joint venture and facility. But the idea of a private-equity company running the facility if a deal is reached also reinforces a message the market already learned over Sunoco’s multiple quarters of red ink: Sunoco is in trouble.

“It is funny that they are in effect saying a PE firm may be better operators than them–not exactly reassuring,” Morningstar’s Allen Good tells Dow Jones.

By Dow Jones News Wires