(Toronto) Even as oil rises this year, executives at major oil and gas companies are still focused on spending discipline, according to comments gathered at the industry’s largest conference in Canada.
Industry executives at the Canadian Association of Petroleum Producers conference in Toronto this year focused on predictability and returning money to shareholders, rather than growth.
Suncor Energy President and CEO Rich Kruger took the helm of Canada’s largest oil and gas producer last year as the company grappled with safety and operational issues. He reiterated his goal of bringing clarity and simplicity to the business.
“I want to become consistently and boringly excellent,” Mr. Kruger said. I’m not a big fan of surprise parties. »
Mr. Kruger worked to standardize his operations and create a more stable production plan, unlike the more hasty decisions made when the word “growth” was on everyone’s lips in the industry.
Even though oil has risen about US$15 a barrel this year to US$85, industry executives at the conference stressed that they no longer view production growth as being as deeply linked to the creation of value, and that each additional barrel had to be weighed against the enrichment of shareholders.
The shift comes as investors worry about long-term demand for fossil fuels while efforts to reduce carbon emissions accelerate.
However, forecasts show that oil demand continues to grow, said BMO analyst Randy Ollenberger.
We often hear that demand for oil has peaked, it is not increasing and that is negative for the sector. This is not true, the demand for oil actually continues to grow. It even continues to progress at a higher rate than the average of the last 13 years.
Randy Ollenberger, analyst at BMO
Despite everything, business leaders insist that they will not succumb to the temptation that the appreciation in the price of a barrel could cause.
Cenovus Energy President and CEO Jon McKenzie said his company plans moderate, strategic growth, focused on reducing bottlenecks and completing abandoned projects.
“The growth we have started in 2023 is very different from the type of growth you would have experienced 10 or 15 years ago. We’re not talking about greenfield expansion, we’re not talking about staged expansions. »
Small producers also wanted to emphasize that they no longer valued growth at all costs.
This is the case of the boss of Whitecap Resources, Grant Fagerheim. “Managing growth in a very disciplined way, I think that’s a mantra that has been introduced into the energy sector, and I’m proud to be part of it,” he said.