'I think we can eliminate work,' says new Suncor CEO
Rich Kruger did not specify a timeline for implementing efficiency plans
New Suncor Energy (SU.TO)(SU) CEO Rich Kruger put his executive team on notice Tuesday, telling them on a post-earnings conference call with analysts that "I just signed you guys up to deliver" on his plan to improve safety and operations at the Canadian oil and gas giant.
Kruger, a 40-year veteran of the industry who previously led rival Imperial Oil (IMO.TO)(IMO), promised to act swiftly to boost efficiency across the company, and restore Suncor's reputation as a leader in the oilsands.
"I see a company with untapped potential. I see a gap between our current performance, and what I would consider best-in-class," Kruger said on the call. "Will this be easy? No. But quite frankly, I wouldn't have come out of retirement to be here had it been easy."
From worker deaths at mine sites, to U.S. activist investors calling for parts of the business to be hived off, Suncor has faced a litany of challenges in recent years. Speaking on his first earnings call as Suncor's CEO, Kruger says his plan to address the company's operational issues involves "lots of little things," from cutting downtime at the company's refining business, to shorter hauling distances for trucks at mines. He also suggests a leaner workforce may be in the cards.
"I think we can eliminate work," Kruger said. "If that's focusing on higher-value activities, so be it. If that's eliminating low-value-added work, awesome."
Last year, Suncor said it would cut its contractor workforce by 20 per cent to improve safety and cut costs. On Tuesday, Kruger did not give a specific timeline for implementing his efficiency plans. However, he says "there's no time better than the present."
The veteran oil and gas executive also took aim at a common critique of Suncor versus its peers: the age of its facilities. The company's largest oilsands mine near Fort McMurray is set to run out in the mid-2030s.
"Advanced age is no excuse for poor performance," Kruger said.
Toronto-listed Suncor shares fell 1.57 per cent to $39.45 as at 12:27 p.m. ET on Tuesday. The company reported first-quarter financial results late Monday, booking a 34 per cent drop in earnings year-over-year, due largely to lower realized oil prices.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
Download the Yahoo Finance app, available for Apple and Android.