(Calgary) The man hired to turn around Suncor Energy said Tuesday he thinks the company has focused too much on energy transition in recent years and needs to return to an oil-centric business strategy.
Chief executive Rich Kruger, who took the reins of the Calgary energy giant this spring, told analysts on a conference call that the company’s board agreed with him. on the need for a “revised direction and tone” within the company.
He said he believed Suncor had overlooked “the business drivers of today” in pursuing future-oriented, clean, low-carbon energy businesses.
“We place a bit of a disproportionate emphasis on the long-term energy transition,” Kruger said, adding that while these activities are important, they are not what will make shareholders money today.
“Today, we win by creating value through our vast integrated asset base underpinned by the oil sands. »
Mr. Kruger, the former head of ExxonMobil’s Canadian subsidiary, Imperial Oil, was pulled from retirement this year to lead a restructuring at Suncor following a series of far-reaching operational and financial challenges within of the company.
On Tuesday, he announced that the company had already made “significant progress” toward its new goal of focusing on fundamentals. In June, Suncor announced that it would reduce its workforce by 20%, or 1,500 people, by the end of the year to eliminate unnecessary or “unaffordable” work.
As of August 1, 535 of those job cuts have already taken place, Kruger said, resulting in a cost reduction of about $125 million so far.
Suncor’s stated goal to refocus on its oil sands assets comes even as the company has publicly committed to achieving net zero greenhouse gas emissions by 2050.
Suncor is also a member of the Pathways Alliance, a consortium of Canadian oil sands companies that have all made the carbon neutral pledge and proposed to work together to build a massive carbon capture and storage transportation hub in the north. of Alberta to help reduce emissions from oil sands production.
Last year, Suncor sold its wind and solar assets, withdrawing from the renewable energy sector in which it had been involved for more than two decades.
Suncor Energy said Tuesday it earned $1.88 billion in the second quarter of 2023, up from about $4 billion in the same time last year when oil prices were higher.
The Calgary-based energy giant said it took $275 million in restructuring charges in the quarter related to previously announced job cut plans.
As a result of this restructuring charge, Suncor reported that its adjusted operating funds for the three months ended June 30, 2023 were $2.7 billion or $2.03 per share, compared to $5.3 billion or $3. $.80 per share in the prior year quarter.
The company suffered a high-profile cybersecurity incident in June, but says the breach had no effect on its financial results for the quarter.