When Rich Kruger took the reins of Suncor Energy Inc. SU-T five weeks ago, he found a proud Canadian oil and gas company – but one with untapped potential, and significant gaps between its performance and what he considers best in class for the sector.
He pulled no punches during his first earnings call as chief executive officer on Tuesday morning, telling investors he has one goal: To make Suncor “the best of the best, the undisputed industry lead.”
Mr. Kruger comes with a sense of urgency to what he admits will be no easy task – to strengthen Suncor’s competitiveness and produce results for shareholders.
“My general sense is this organization is ready. It is ready to respond. It is ready to step up and perform. I’m quite honoured and excited to lead it, and I can assure you we won’t leave anything on the table.”
Mr. Kruger took over as CEO on April 3, but he is already a familiar face in the energy sector – particularly in Calgary, where he spent seven years at the helm of Imperial Oil Ltd. before retiring in December, 2019. For more than 30 years prior to that, he worked around the world with Imperial’s parent company, ExxonMobil Corp.
Speaking with The Globe and Mail Tuesday afternoon, in a boardroom on the 45th floor of Suncor tower in downtown Calgary, Mr. Kruger said his experience and skill sets “are what the company needs right now.”
Mr. Kruger replaced interim CEO Kris Smith, who stepped in after Mark Little resigned in July, 2022, following months of pressure from activist investor Elliott Investment Management LP, a U.S.-based hedge fund. It was unhappy with Suncor’s safety record, operational issues and lagging share price and, a year ago, launched a public campaign to oust several directors at the oil sands producer and explore a sale of its Petro-Canada gas station chain.
Mr. Kruger said he has already spoken with Elliott – he’s engaged with many shareholders since he started, he said – but hasn’t felt any pressure from the firm.
His focus, he told The Globe, will be creating a more profitable company by focusing on safety, operational integrity and reliability.
“I very much believe in making money. We are in business to make money – and as much of it as possible. And everybody, starting with me, needs to see how they do that,” he told investors on Tuesday morning.
Expanding on that thought later, Mr. Kruger told The Globe that money is hard enough to make in the first place, so “you’ve got to be really judicious about how you spend it.” He will look long and hard at how Suncor does that, he said, and figure out whether the company is getting the best bang for its buck.
Take its deal with TotalEnergies SE TTE-N, in which it agreed to acquire the French company’s Canadian assets for $5.5-billion, including Total’s remaining stake in the Fort Hills oil sands project and a share of the Surmont project, both in northern Alberta.
Houston-based ConocoPhillips owns a 50-per-cent stake in Surmont and holds a right of first refusal on the remainder of the property, but Mr. Kruger hopes the Americans will come to the table as a willing partner in the project and believes a Suncor-Conoco partnership could make the asset even more valuable.
When it comes to Suncor’s operations more broadly, Mr. Kruger said he sees a lot of opportunity for organizational efficiency, whether that’s focusing on higher-value activities or eliminating low-value-added work.
Even with Suncor’s relatively strong balance sheet, Mr. Kruger very much believes in making only selective, well-timed investments to help grow dividends and reward shareholders “for their faith and ongoing commitment to the company.”
Suncor’s portfolio includes some of the oil sands’ older assets, but “advanced age is no excuse for poor performance,” he told investors Tuesday. It just means the company needs to become more thoughtful, more creative and flawlessly execute fundamentals such as maintenance, reliability programs and risk management.
But why leave a comfortable retirement at all?
“I’ll tell you what it wasn’t. I’ve had a long career. It wasn’t the money. It wasn’t the ego,” he told The Globe.
When the Suncor board extended him the offer, he realized he had “a level of empathy” for some of the company’s challenges, such as its safety performance.
Granted, he’s only five weeks into the job, and admits it might be a different story in four or five years.
“But right now I spring out of bed and I come in here because I think I can make a difference,” he said.
“If you have something in life that you feel passionate about, and you think you can make a difference, I think you’re leading a pretty good life. And right now I think I’m one of the luckiest people in this city.”