Second-quarter profit more than quadrupled to nearly $4 billion
Suncor Energy (SU.TO)(SU) interim president and chief executive Kris Smith says improving the company’s “unacceptable” safety record will take more than just pouring cash in new technologies to protect workers.
Speaking on his first post-earnings conference call with analysts, Smith stressed the need to “engage and empower” those on the front lines of Suncor’s operations, especially workers performing high-temperature work. risk involving heavy vehicles and working around water.
Last month, Suncor CEO Mark Little resigned from his post a day after the company’s 13th job site death since 2014. The string of deaths was among the grievances of US hedge fund Elliott Investment Management, which recently reached an agreement with Suncor to appoint three new directors and review the sale of its chain of Petro-Canada gas stations.
“It’s not just to say that we didn’t invest in technology and therefore had security issues,” Smith said on the call, in response to a question about the cause under underlying incidents.
“Technology is an enabler. It’s one of the things we can do to improve our ability to manage risk. And if we fail, we fail safely. But it’s not at the root part of the problem, the fact that those systems weren’t there.”
He says Suncor will soon announce a date for a meeting to provide more details on job performance and safety. The company canceled such an event last month, following the death of a worker at the Base mine site near Fort McMurray, Alberta.
Although Suncor says it does not rely solely on technology to improve safety, Smith says the company will deploy technology-based safety measures throughout 2022 and 2023, including anti-collision systems for the vehicles.
Smith adds that he has the full support of Suncor’s board of directors to make the necessary changes.
“We don’t need more diagnosis, but what we need to do is execute,” he said. “We’re really focused on understanding how work happens on the front line, how it’s managed, how it’s executed.”
Meanwhile, rising crude prices have led to a Calgary oil producer and refiner quadrupled in profits in second quarter. It released its financial results for the three months ended June 30 after the closing bell on Thursday.
Suncor says net income climbed to $3.996 billion, or $2.84 per share, from $868 million in the same period last year. The company says adjusted fund trading exceeded $5.35 billion in the quarter, the highest in company history, with North American benchmark crude price averaging $108 the barrel.
Total upstream production for the quarter was 720,200 barrels of oil equivalent per day (boep/d), compared to 699,700 boep/d a year ago. Suncor lowered its 2022 production forecast to 740,000 to 760,000 barrels per day from 750,000 to 790,000.
The company cited inflation and spending needed to improve security as it raised its full-year capital spending forecast to $4.9 billion from $4.7 billion to $5.7 billion. billions of dollars.
At the same time, Suncor is reducing its portfolio of energy assets. The company said it has begun a process to sell its UK business and signed an agreement to divest its Norwegian assets for $410 million. In both cases, the buyers are not disclosed. Suncor expects to complete the Norwegian sale in the fourth quarter. In April, Suncor announced plans to sell its Canadian solar and wind businesses as it shifts its focus to hydrogen and renewable fuels, seen as more complementary to its core oil and gas businesses.
Toronto-listed Suncor shares slid 0.20% to $39.38 at 11:34 a.m. ET on Friday. The stock has climbed more than 64% in the past 12 months.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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