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The Suncor Energy logo is seen at their head office in Calgary, Alberta, April 17, 2019.CHRIS WATTIE/Reuters

Analysts say Suncor Energy Inc. shareholders eager for change are going to have to be patient, following Thursday’s announcement by activist hedge fund Elliott Investment Management LP that it is seeking a shakeup of Canadian oil sands giant.

Elliott launched its multi-pronged campaign Thursday morning. The U.S.-based fund has several goals, including ousting several directors, exploring a sale of Suncor’s Petro-Canada gas station chain, implementing an executive leadership review, overhauling the company’s operational and safety culture, and enhancing capital returns.

Elliot’s move didn’t surprise Laura Lau, the chief investment officer with Brompton Group, because Suncor simply hasn’t performed as well as many of its peers.

“It’s done okay because all of energy has gone up and oil prices have gone up, but it’s definitely been the laggard,” she said Friday.

A large part of that boils down to the age of Suncor’s assets such as the Syncrude plant, which are some of the oldest in the oil sands.

This past winter saw the failure of two new chains that drive crushing equipment at Syncrude’s Mildred Lake mine. And over at Suncor’s Firebag asset, two critical furnaces failed because of frozen air louvers. Together, the problems cut production by approximately 195,000 barrels a day in the latter half of December.

The oil giant has also seen a rash of safety incidents over the past few years, including on Jan. 6 when a worker died in a collision between two heavy haul trucks at Suncor’s Base Plant operation, north of Fort McMurray. The collision also sent two other workers to hospital.

Analysts have repeatedly expressed concerns that crashes and equipment failure underscore deeper problems with Suncor’s operational track record, prompting the oil company to beef up its leadership team in February to try and improve performance.

It also released plans to deploy collision-mitigation technology commonly used in the global mining industry across its entire oil sands operations.

“As CEO, the accountability for safety and operational excellence is with me. Period. I own this,” Suncor chief executive Mark Little said at the time.

Elliott doesn’t believe Mr. Little, who took the helm in 2019, should remain as CEO, but wants a reconstituted board to ultimately make that decision, sources told The Globe and Mail Thursday.

And Ms. Lau thinks he might be in trouble.

Chief executives are “good for different times,” she said. He made a lot of good acquisitions, particularly in a time of low oil prices when it’s not easy to pull the trigger on deals, but “people are questioning is he the right one going forward” when it comes to growth and operational goals.

Whether Mr. Little stays or someone else end up at the helm of the company, though, Suncor’s CEO will likely preside over rising fortunes anyway, thanks to the improving COVID-19 picture, years-high oil prices and the fact the company’s Fort Hills facility is ramping up.

“I wouldn’t mind being the new CEO,” she said.

“You’re going to look good. You’ve gone through the dark times. You’ve probably gone through the worst.”

A research note from National Bank of Canada said Suncor’s complex business model means shareholders are going to have to be patient for change, no matter what.

The company has been attempting to improve execution over the last several years, it noted, and “although results have not met expectations, the attempts have been taking place through a challenging part of the cycle.”

In the end, though, it agreed with Elliott that Suncor needs a shakeup. And while it’s indifferent to the steps the company takes to get there, it said the focus should be on the company’s oil sands assets.

Raymond James Ltd. said in a research note that investor confidence in Suncor has been shaken over the last 24 months by both operational missteps and a dividend cut, and frustration stemming from the company’s slow pace of progress.

And while the oil sands producer has made some improvements that have benefitted shareholders, it noted that the public demands made by Elliott could serve as a catalyst to push Suncor stocks even higher in the near and medium-term.

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