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Even the biggest oil-sands bulls don't think the party north of Fort McMurray will last much beyond 100 years. It's already showing signs of fatigue: Thousands of jobs have been hacked and billions of dollars' worth of new projects scrapped, shaving more than a million barrels a day from the long-term production outlook. But Steve Williams plans in centuries. And the CEO of Suncor Energy sees no reason the music should stop so soon.

"We plan to be there as long as that reserve is being developed," he says, perched in a boardroom on the 46th floor of Suncor's Calgary headquarters. That "could be 200, 300 years from now," he proclaims. "Everything we do there is long-term."

Just as some of the world's largest energy companies flee for the exits, Williams is doubling down in the oil sands. He sees the collapse of oil prices (to around $50 U.S. from more than $100 a barrel a year and a half ago) not as a long-term risk that has permanently squelched growth prospects, but as a chance to pick off weaker rivals.

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"We're not really a shark," he insists—but he does smell blood.

Last month, Suncor sank its jaws deep into its close rival and next-door neighbour in the muskeg of Northern Alberta, launching an unsolicited takeover bid for Canadian Oil Sands (COS). The play (code-named Mustang) came weeks after Williams beefed up Suncor's stake in the $15-billion Fort Hills mine, despite lingering questions about the project's economics.

The moves add up to a brazen bet on the future of the oil sands—an industry Suncor helped build, but one that now faces a reckoning as profits shrivel and global efforts mount to slow growth in climate-warming greenhouse gases. The latest setback: In early November, Barack Obama rejected the Keystone XL pipeline, dealing a blow to the industry's long-held ambition to reach more lucrative export markets.

Williams is unfazed. In roughly a decade at Suncor, he has helped transform a big-spending behemoth into a frugal giant with a quasi-religious zeal for controlling costs. Nonetheless, Suncor hasn't exactly skated through the oil crash. Layoffs since January, 2015, top 1,300, and about $1.4 billion has been chopped from this year's budget. Meanwhile, net earnings in the first nine months of the year plunged to $12 million, from as much as $2.6 billion over the same stretch in 2014. (On an operating basis, the drop was less extreme, but still significant: Earnings tumbled 65%, to about $1.5 billion.)

Still, the company is churning out cash, buoyed by strong results from its refining division. By early November, Suncor's shares had notched a modest gain on the year compared to a roughly 30% slide in the broader listing of energy companies on the Toronto Stock Exchange. Cash flow skidded just 17% in the third quarter from a year earlier, versus a 50% drop in the price of global benchmark Brent oil. In the oil sands, Suncor's cash operating costs per barrel have fallen to $27—the lowest since 2007. As of Sept. 30, the company had amassed a $5.4-billion war chest.

No other oil-patch executive has displayed the same mix of swagger and vision as Williams in what is clearly the industry's darkest hour. That makes him the standout candidate for CEO of the Year—a nod that will no doubt have many of his rivals grumbling.

Indeed, his call for a broad-based tax on carbon emissions has put him at odds with oilmen across Alberta, as many bemoan the fact they're being pushed to slash emissions when they can least afford to invest in new, cleaner technologies. "Climate change is happening," Williams told industry leaders last spring. "Doing nothing is not an option."

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Similarly, his $4.3-billion all-paper bid for COS has shaken Calgary's clubby corporate scene. And Williams is by no means done scouting for deals—though he's clearly uncomfortable being labelled a predator. In fact, he refuses to even call the deal "hostile." Ryan Kubik, COS's chief executive, is shopping for rival suitors and insists Suncor is trying to fleece shareholders. Williams, meanwhile, is growing impatient.

"I've been talking to their CEO and their chairman since March," he says. "How long a conversation can you have?"


Suncor's CEO possesses, by all accounts, a hyper-inquisitive mind. The son of a plumber in Bristol, a port city in southwest England, he describes his upbringing as "very humble." Yet, the family home was filled with lively debate, which he credits for moulding three overachieving kids. His brother is now a coroner in Somerset; his sister worked in the U.K. education inspectorate. Growing up, Williams played rugby—first as a hulking prop ("I grew funny," he says, "so early on, I was big") and later as a light-footed fullback. The 59-year-old still jogs regularly, and finds time between his role at Suncor and multiple charitable organizations to ski and play golf. He likes to cook (from Indian to French) and enjoys preparing meals with guests at dinner parties.

Jim Simpson, Suncor's board chairman, is often baffled by his colleague's pace and intellectual rigour. "I have, from time to time, wondered how he does what he does," Simpson says. "Just mentally, he does a lot of preparation. You can ask him anything, any time, and he knows the answers. Detailed questions, strategic questions—it really doesn't matter. He's thought his way through pretty much everything that is relevant to our business."

Williams admits to being "intellectually impatient." He can be wordy. Early in his tenure at Suncor, he was nudged by advisers to be more succinct on quarterly analyst updates. Williams viewed it as "so very American to go out there and lay it down," a person familiar with one episode of verbosity says. "He pleaded that it wasn't in his character and was never going to be."

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Williams graduated from Exeter University in 1977 with a degree in chemical engineering and joined a unit of what would become Exxon Mobil. By the time he left 18 years later, he was operations manager at the Texas-based giant's sprawling Fawley refinery in the U.K., fusing technical know-how with a knack for managing people inside large organizations.

To this day, Williams comes off as a man fully steeped in Exxon's famously staid corporate culture. But he is also described by colleagues alternately as a "brilliant," "gutsy," "methodical" and "rational" oil executive—albeit one with an "enlightened" streak.

But the portrait is incomplete. It is common for Exxon employees on the management track to spend their entire careers there. Williams, who sits for our interview in an open-collared shirt sans tie, felt hemmed in by the rigid structure.

After Exxon, he helped spin off chemical maker Octel Corp. from its parent company. That experience put him in touch with debt and equity markets in the U.S., giving the operations-focused engineer added familiarity with finance. About that time, a headhunter showed up with an intriguing opportunity. Did he want to manage money for a little-known oil company called Suncor? Williams balked: "I didn't know if I wanted to count beans."


Williams also had doubts about dragging his wife, Mary, and their two kids—Jack, then aged 9, and Emma, then 10—from the north of England to a scrappy oil city nestled in the foothills of the Rocky Mountains. He'd been offered a job that would have taken the family to south London, and besides, he was keen to get his hands dirty. Initially, he told then-CEO Rick George he had the wrong guy.

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But George was persistent. He was searching for a chief financial officer with experience at a super-major, befitting George's ambition to pump a million barrels per day from the oil sands by decade's end.

A months-long courtship ensued. George, originally from Colorado, was aggressively fixated on top-line production growth, at the expense (so say detractors) of profits. At the time, Suncor was a minnow. It was early 2002, and the company's brand-new Millennium mine was struggling to reach full capacity, wracked by power outages and frigid Alberta weather. Output targets had been chopped and profits were anemic. George (who declined an interview request) needed help smoothing out performance and driving down costs at Suncor's refining and upgrading operations—vast tangles of pipes and vessels that convert molasses-like bitumen into lighter oil suitable for refining into gasoline. The pitch to Williams was straightforward: Come to Calgary and test our strategy, then go run the oil sands business. "The big challenge for Suncor was to run what it had," Williams recalls. "We were underperforming with our assets. I knew how to do that stuff."

So it was that Williams, together with his family, opted for an "adventure" in Western Canada. He committed to three years in Calgary. He moved on after just one, decamping to Fort McMurray, a scraggly outpost 500 kilometres north of Edmonton that has only recently started to shed its boom-town exterior. For the U.K. transplant—he became a Canadian citizen in 2002—the experience was jarring. "You are on the edge," he says. "You're isolated." But the Williams family adjusted to what he says is a very close-knit community. "It's quite old-fashioned in a sense, because you know everyone."

It's been nearly four years since Williams took the company's helm. He calls his predecessor a "great leader" and credits him with turning a small, unprofitable oil sands developer into an energy giant with a market capitalization that today is approaching $60 billion. But there are stark differences between the two men. "He had that desire and ambition to grow," Williams says. "And don't infer from this that I don't have that. I just think there's a different way of doing it when you get the hand I was dealt."

The difference reflects, in part, seismic shifts that have upended global energy markets. Among the biggest is the flood of shale crude uncorked in the United States, which has played a role in driving down prices. Whereas George chased big production targets, Williams has long said he isn't much interested in growth for its own sake. Instead, he views the company's core as a delicate balance between managing project costs, quality and schedule. Early on, he pulled the plug on Suncor's $11.6-billion Voyageur upgrading plant, which was midway through construction—a sharp break from the company's history of lavish spending that analysts say presaged structural changes in crude markets.

Williams says he believes firmly in leading by example. In 2014, several Suncor workers died, including one from a bear attack. In response, Williams docked the bonuses of senior leaders by more than 10% (Suncor also created a safety task force and mandated wildlife training for field workers).

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On the operations side, Williams sees parallels between Suncor's early woes and the faltering Syncrude operation. When he took over as CEO, there were doubts on Bay Street about his ability to deliver smoother performance while at the same time keeping a lid on costs. Today, George's million-barrel vision has been eclipsed by an efficiency drive and a modest goal to squeeze 100,000 barrels a day of new output from existing assets. By November, reliability at the company's upgrading plants was above 90%, and Williams was openly musing about driving oil sands cash costs under $20 (U.S.) a barrel. "I think the Street presumption was that they would spend every dollar that came their way," says Bank of Montreal oil analyst Randy Ollenberger. "He got a lot of pushback on that. His response was, essentially, 'Watch me.'"


The takeover of Canadian Oil Sands may be Williams's biggest challenge yet. If all goes according to plan, Suncor's ownership stake in the Syncrude operation would jump to 49%, from the current 12%. (COS is the largest partner in the joint venture.)

Few expect Williams to stop there. Still, some analysts question the wisdom of piling on exposure to oil sands assets as competitors beat a hasty retreat. Even fans doubt Williams can fully deliver on a pledge to boost reliability at Syncrude. The operation led by Exxon has struggled for years under a complex management agreement, repeatedly missing production targets because of breakdowns and outages.

"We've heard that for over three years now from various parties involved within Syncrude," says Lanny Pendill, an analyst at Edward Jones in St. Louis. "So far, nobody's been able to do it."

Since announcing the bid in early October, Williams has gone on a marketing blitz, pitching the deal to COS shareholders as a lifeline. (COS posted a loss of $174 million in the three months ended Sept. 30 and has chopped its dividend 86% since the downturn began.) Over 10 days in October, Williams's itinerary included stops in Toronto, New York, Los Angeles, San Francisco and Victoria. In Calgary, however, the target company branded the deal naked opportunism. It rejected the offer and instituted a shareholder-rights plan that requires a bid to be open for 120 days. (Suncor has challenged the move before securities regulators.) Billionaire investor Seymour Schulich, who owns about 5% of COS, likened Williams to a bandit and vowed to fight the takeover in court.

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The way Williams sees it, however, is that long-suffering COS shareholders face a "stark" choice. The company is saddled with $2.3 billion in debt and faces a "precarious" future, he told analysts in October. A friendly approach was spurned last spring. A rejection this time could trigger a collapse in the share price, he says. (By early November, the stock had shed about 40% of its value in a year.)

Williams insists he can leverage Suncor's size and proximity (the facilities are literally across the street) to drive cost savings at the aging plant. Elsewhere, however, he has been dogged by questions about Fort Hills, a mega-mine the company is cleaving from Alberta's boreal forests north of Fort McMurray. Suncor inherited the project when it merged with Petro-Canada, and the first drops of oil won't flow until 2017, leaving some room for commodity markets to recover. "It's been punted around for as long as I can remember," says one analyst. "And now we're in an extremely challenged environment on oil prices, which is going to make it really difficult to run that project profitably." Williams ardently defends the venture, urging doubters to look beyond the enormous price tag and today's commodity trough to the "wall of cash" the project will generate once it starts up.

But how does the sprawling open-pit mine at Fort Hills, designed to pump ultra-viscous crude for more than half a century, square with Williams's more recent support for taxing carbon dioxide emissions? Suncor chairman Simpson says Williams's stance on carbon wasn't formally vetted at the board level, though it was understood and accepted. "He basically took that position in the company and said, Listen, we're changing gears," Simpson says.

Williams flatly rejects the view that oil sands reserves will be stranded under more stringent climate regulations—"I just think technology solves that"—and says he's working on an initiative he believes will break the deadlock on major oil sands pipelines, although he won't provide specifics.

He is similarly guarded about upcoming climate talks in Paris, but hopes a framework emerges that goes some way toward removing the target from the oil sands. The Alberta deposits have been unjustifiably branded as climate enemy No. 1, he says, to the detriment of pragmatic solutions aimed at addressing societal consumption habits. Indeed, far from penalizing the industry, he says, an economy-wide carbon tax that funnels cash to promising technologies might just tilt the scales in favour of his company's long-term business plans—even if he isn't around to fulfill them.

"Lots of people look at it in the short term," he says. That's a problem. "It's like boiling the frog—you don't even realize you're dead."

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