Varcoe: 'I'm right here to remain': New CEO Wealthy Kruger pursuing turnaround at Suncor

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Suncor Vitality’s new CEO Wealthy Kruger wasn’t planning an enormous return to the oilsands after retiring from the Canadian business greater than three years in the past and transferring again to the US.

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However when the corporate started searching for a brand new chief final 12 months, Kruger — who ran Imperial Oil for almost seven years till he retired in 2019 — obtained a name to contemplate a brand new alternative.

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The problem?

Take the helm of his former rival, one of many nation’s largest oilsands operators — an built-in producer and proprietor of the enduring Petro-Canada retail community — and refocus the corporate after a interval of being “down on its luck somewhat bit.”

“It’s not one thing I pursued,” Kruger mentioned in an interview Tuesday in Suncor’s headquarters.

“Actually, I’m not doing this for the cash. I’m not doing this for the ego. I simply suppose I could make a distinction . . .

“The primary three or 4 replies have been, ‘Oh no, you recognize, I’m retired. I’m this and that.’ However then the wheels begin spinning . . . It form of snowballed. And I actually imagine I’m proper the place I should be in life.”

Kruger accepted the job in February. On Tuesday, Suncor held its first annual assembly and quarterly earnings name since he formally took over as CEO final month.

The 64-year-old govt leads an organization with a $52-billion market capitalization, greater than 16,000 staff and first-quarter manufacturing that averaged 742,000 barrels of oil equal per day.

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It’s additionally a enterprise that has been caught up in a whirlwind of change over the previous 12 months.

This was highlighted by a distinguished activist investor calling final spring for a revamp at Suncor because of missed targets, an underperforming share value and security issues, together with a number of work web site fatalities.

Former CEO Mark Little left the corporate final July, a day after a contractor died at Suncor’s base oilsands mine.

Later within the 12 months, Suncor’s board examined and rejected a name by Elliott Funding Administration to promote Petro-Canada.

Nevertheless, it now has a brand new chief, a veteran of ExxonMobil who then grew to become CEO of Imperial Oil in 2013.

Within the interview and on an earnings name Tuesday with analysts, Kruger left little doubt that change is coming at Suncor, an organization that “in my prior life, it was our No. 1 competitor.”

He additionally laid out the challenges forward: enhance security, improve reliability, decrease prices and enhance the profitability of Suncor.

The corporate has underperformed in recent times and Kruger might want to get its numerous divisions to speak higher and “purchase in” to his mandate for change, mentioned Rafi Tahmazian, a senior portfolio supervisor at Canoe Monetary, which owns shares in Suncor.

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“It’s a very advanced enterprise. And it requires somebody with the information of it,” Tahmazian mentioned. “There have to be extremely low-hanging fruit there.”

Analyst Patrick O’Rourke of ATB Monetary mentioned buyers will need to see how the corporate particularly strikes ahead with its company technique.

“There’s a problem, when it comes to altering investor sentiment towards the title, and I believe the one possible way to try this is thru execution,” he mentioned.

Final 12 months, Suncor boosted its stake within the Fort Hills oilsands mine, which it operates, by shopping for a 14.6 per cent curiosity in it from Teck Assets for $712 million.

Earlier this month, Suncor unveiled the $5.5-billion buy of TotalEnergies’ Canadian belongings, together with the French firm’s 31 per cent within the Fort Hills oilsands mine. It offers the Calgary-based firm full possession of the event.

As a part of the take care of TotalEnergies, Suncor additionally acquires half of the Surmont thermal oilsands challenge, which is co-owned by ConocoPhillips.

Throughout the first quarter, Suncor additionally introduced the sale of its United Kingdom exploration and manufacturing belongings, together with North Sea properties, to Equinor for about $1.2 billion.

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The corporate posted web earnings of $2.05 billion within the first quarter.

In his first weeks on the job, Kruger has toured about half of Suncor’s main belongings. The problems going through Suncor have been tied to its security efficiency, together with some working and reliability issues, he mentioned.

However Kruger is assured it can enhance.

“The corporate perhaps misplaced somewhat little bit of its working mojo,” he mentioned.

“This group is admittedly poised for, I don’t need to name it a turnaround essentially, however . . . I believe this group is admittedly prepared to reply.”

Throughout the firm’s earnings name, Kruger spoke about decreasing spending in areas the place the corporate isn’t including worth, simplifying what it does and getting “incrementally higher on the fundamentals” in its upstream enterprise.

Requested in the course of the interview how lengthy he intends to stay as CEO, Kruger mentioned he had a “very frank dialog” with the board on that query.

The outspoken CEO famous he’s transferring again to Calgary and intends to remain on the job so long as he’s having enjoyable, thinks he can assist the enterprise attain its potential and the board believes he’s including worth.

“I mentioned so long as these three issues are in place, age is only a quantity,” Kruger added.

“I don’t have a quantity. I’m right here. I’ve bought my home in Texas. All my stuff is coming this fashion. I’m transferring right into a home right here. So, you recognize, get used to me . . . I’m right here to remain.”

Chris Varcoe is a Calgary Herald columnist.

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