(Calgary) Suncor Energy’s new boss says he is focused on cutting costs as he works to improve the oil sands giant’s performance.
Rich Kruger, who took over as Suncor’s new chief executive on April 3, promised on Tuesday that the company would become a “simpler, more focused organization” under his leadership.
On a conference call with analysts to discuss the company’s first quarter financial results, he promised to be candid, transparent and proceed with a “sense of urgency” as he seeks to fill its mandate to bring change to the Calgary-based company.
“I see myself as reasonably decisive and very competitive,” Kruger said. I play to win. »
A familiar face in the Canadian oil industry, Mr. Kruger led Imperial Oil as President and Chief Executive Officer from 2013 until his retirement in 2019. His time at the helm of Imperial was the culmination of his 39-year career with his parent company, the American ExxonMobil.
Mr Kruger’s appointment to Suncor’s top job – replacing interim chief executive Kris Smith, who took the job after Mark Little resigned in July 2022 – came after months of pressure from investors , on the heels of a series of workplace fatalities, safety incidents and production difficulties that are dragging the company’s stock price.
Kruger said Tuesday that his first five weeks with Suncor saw him visit half of the company’s major facilities and meet with workers and management.
While he sees Suncor as a proud company with great people and high quality assets, he believes it has untapped potential.
“I see a gap between our current performance and what I would consider best in class in so many areas,” he said.
He also spoke about the importance of “organizational efficiency” and suggested that there are ways to lean the company and reduce its costs.
“I think we can eliminate work. I think we can remove work that doesn’t add value,” he said, adding that all employees need to think about how their role helps generate revenue for Suncor.
“I strongly believe in making money. We are in this business to make money and as much as possible, and everyone, starting with me, needs to see how they do that,” Kruger said.
Mr. Kruger’s ability to turn the tide of one of Canada’s largest energy companies will come under scrutiny from many, including US activist investment firm Elliott Investment Management, which had pushed for a change at the head of Suncor.
Two of the board directors serving on the CEO search committee who recruited Mr Kruger were appointed to the Suncor board last summer, as part of a deal the company struck to appease Elliott InvestmentManagement.
Elliott had publicly expressed frustration last spring over what he felt was a decline in the energy producer’s performance.
The activist investor also criticized Suncor for its safety record. At least 12 workers have died at the company’s oilsands operations in northern Alberta since 2014, and former chief executive Mr Little resigned the day after the most recent death.
Interim chief executive Smith will assume the role of chief financial officer and vice president of corporate development later Tuesday, following Suncor’s annual general meeting.
Alister Cowan, the current chief financial officer, is due to retire at the end of the year.
Profits down in the first quarter
Suncor posted a first-quarter profit of $2.05 billion on Monday after markets closed, which compares to a profit of $2.95 billion for the same period in 2022.
The Calgary-based energy giant’s net income included a $302 million gain related to the sale of the company’s wind and solar assets, which the company recently sold to Canadian Utilities for $730 million.
On an adjusted basis, Suncor said its first-quarter operating profit was $1.81 billion, or $1.36 per share, down 34% year-on-year. ‘other.
The company explained that the decline in profit was primarily due to lower crude oil realizations, higher operating expenses, lower upstream production and refinery throughput, and the weakening crude oil prices.