TC Energy president and CEO Russ Girling addresses the company's annual meeting in Calgary, April 27, 2018.Jeff McIntosh/The Canadian Press
Former TC Energy Corp. chief executive officer Russ Girling is taking on the role of chairman at Suncor Energy Inc., the oil sands producer announced as it reported quarterly results that beat analysts’ expectations after a year of disruption.
Mr. Girling is replacing Mike Wilson, who has been chair of Calgary-based Suncor since 2017. Mr. Wilson will not stand for re-election to the board at the company’s annual meeting this spring. Another director, Dennis Houston, is also stepping down from the board.
Mr. Girling, 62, led TC, previously called TransCanada, for 10 years until he retired in 2020. His tenure was a tumultuous decade for the company, during which it tried and ultimately failed to win approval for its Keystone XL oil pipeline project. At the same time, Mr. Girling presided over a major expansion. The company’s largest deal was the US$10.2-billion takeover of Columbia Pipeline Group in 2016, which bolstered TC’s presence in the United States.
Mr. Girling is also chairman of Nutrien Ltd., which like Suncor has undergone high-profile executive changes, including at the CEO level. He joined Suncor’s board in 2021.
Suncor CEO Rich Kruger said in a statement that he is looking forward to making use of Mr. Girling’s “extensive industry experience and leadership expertise.”
Mr. Kruger, the former head of Imperial Oil Ltd., signed on to the top job at Suncor in April, pledging to improve the company’s safety record, operating performance and financial results after a string of workplace fatalities and outages at production facilities.
Activist shareholder Elliott Investment Management LP had previously launched a campaign to highlight Suncor’s underperformance compared to its peers, which culminated in former CEO Mark Little stepping down.
In a conference call on Thursday to discuss fourth-quarter results, Mr. Kruger said Suncor’s performance is improving despite months of “disruptive and potentially distracting” moves at the company, including executive changes, sizable job cuts and large asset acquisitions and sales.
During 2023, the company eliminated 1,500 positions. It bought out its partners in the Fort Hills oil sands project in northern Alberta for $2.2-billion, and sold off $1.8-billion of assets, including North Sea offshore holdings and its wind and solar business.
Suncor’s fourth-quarter net earnings rose 3.7 per cent from the year before to $2.8-billion, or $2.18 a share. Adjusted funds from operations fell 3.6 per cent to $4-billion, or $3.12 a share. That result included a one-time tax benefit of $880-million.
Oil sands bitumen production averaged 866,200 barrels a day in the quarter, up 7 per cent from a year earlier.
The company’s financial momentum is expected to extend into 2024, with a focus on safety, production, costs and profitability, Mr. Kruger said.
The financial results beat market expectations on the strength of better-than-expected price realizations in the company’s oil sands operations, and improved performance in the company’s refining and marketing segment, TD Securities analyst Menno Hulshof wrote in a note to clients.
He also noted Suncor’s employee and contractor safety record in the quarter, which was the best in the company’s history. “In our view, this is an important milestone in regaining investor confidence following a string of missteps predating the current CEO,” Mr. Hulshof wrote.
He rates Suncor stock as a “hold,” but he increased his one-year target price to $48. The shares were off 13 cents, at $45.22, as of the close of trading on the Toronto Stock Exchange Thursday. They have climbed 7 per cent so far this year.
Jeffrey Jones