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Suncor Vitality Inc. says it has wrapped 1,500 job cuts two months forward of schedule, however that it’ll proceed to search for areas to trim as a part of a wider effectivity push.
Chief government Wealthy Kruger stated on an earnings convention name Thursday that the cuts are anticipated to avoid wasting $450 million a yr, or about $50 million greater than what they anticipated when the cuts have been introduced in June.
The additional financial savings got here partly from further reductions of contingent employees and contractors, whereas the general cuts, mixed with management and structural modifications, put the corporate in a extra aggressive place, stated Kruger.
“We’re a less complicated, extra centered group, positioned to compete and win.”
The corporate can be pushing forward with plans for fewer, greater vehicles; shopping for and leasing a mixed 55 ultra-class 400-ton vehicles that can displace almost twice as many smaller third-party automobiles, stated Kruger. The vehicles will probably be driverless-ready as a part of a wider push into the expertise.
Suncor will probably be ramping up the variety of vehicles operating autonomously at its Base Plant operation from 31 as of the second quarter this yr to 91 by the top of subsequent yr.
“If our knowledge is appropriate, this would be the largest single mine fleet of autonomous extremely class vehicles globally,” stated Kruger.
The corporate just isn’t achieved discovering efficiencies in its contractor base, however additional enhancements will probably be more durable as a lot of the waste has already been taken out of the system, stated Peter Zebedee, government vice-president of oilsands.
“Now we’re extra subtle examples of built-in planning and scheduling, and upkeep, scheduling exercise to drive additional efficiencies. So do I believe there’s extra? Sure, completely. However these items is a little more tough to go after.”
CEO dedicated to cost-cutting, simplifying since taking over position in April
Kruger stepped into the chief government position in April with a dedication to cost-cutting and simplifying Suncor’s operations. He drew criticism earlier this yr for saying the corporate had been too centered on the longer-term vitality transition and the shift towards clear and low-carbon vitality sources.
Kruger made no point out of local weather change on Thursday’s name, although Kris Smith, chief monetary officer, reiterated the corporate’s dedication to its 2030 emission discount objectives that it plans to attain although initiatives akin to a cogeneration challenge and carbon seize plans.
On Thursday’s name Kruger as an alternative saved his concentrate on financial savings, speaking about how a lot firm efforts would cut back its break-even worth on a barrel of oil. The job cuts ought to work out to about US$1.20 per barrel, whereas the extra environment friendly vehicles ought to shave about US$1 per barrel, he stated.
“We’re it very, very intently when it comes to, , bang for the buck.”
He stated that together with operational modifications, the corporate would additionally take a look at the company aspect as it really works in direction of a US$5 per barrel preliminary financial savings goal.
Firm reviews $1.54 billion revenue in third quarter
The continued financial savings push comes as the corporate reported on Wednesday night a revenue of $1.54 billion within the third quarter of 2023, in comparison with a internet lack of $609 million within the prior yr’s quarter. On an adjusted foundation, Suncor earned $1.98 billion or $1.52 per frequent share within the third quarter of 2023, in comparison with $2.57 billion or $1.88 per frequent share within the third quarter of 2022.
The corporate attributed the lower in adjusted earnings to decrease crude costs year-over-year and a weaker enterprise atmosphere, in addition to elevated royalties and decreased gross sales volumes resulting from worldwide asset divestments.
Suncor has additionally been pushing to enhance its security document. A minimum of 12 employees have died on the firm’s oilsands operations in northern Alberta since 2014, and former CEO Little resigned simply at some point after a fatality in July final yr.
Kruger stated the corporate’s monitor document is bettering, together with zero life-threatening or life-altering accidents up to now this yr, whereas its refining operations had no recordable accidents within the third quarter, the primary injury-free quarter within the firm’s historical past.
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