Suncor Energy interim CEO sees mandate for change after safety problems

“To be clear, as interim CEO, my mandate is not to simply maintain the status quo,” Kris Smith said in his first public remarks to analysts since his appointment in July.

He added later, on a quarterly conference call, that he plans to overhaul Suncor’s processes while the board of directors conducts its CEO search. “We can’t stand still. I have the full support of the board to drive the changes necessary.”

Former CEO Mark Little resigned after the latest of a string of fatalities at sites operated by the second-biggest Canadian oil producer. Suncor has also struggled with operational problems that have hampered production.

Smith said Suncor had already assessed the problems at its oil sands mining sites and is focusing on risks such as contact between vehicles and work around water.

“We’re clear on what we need to do to improve our safety performance,” Smith said. “We do not need more diagnosis, but what we do need to do is execute.”

Suncor struck a deal with activist investor Elliott Investment Management last month, appointing three new independent directors and launching a review of its fuel retail business. Elliott had criticized the company’s performance.

Suncor shares edged higher in Toronto, lagging much stronger gains by its peers.

Smith said Suncor will engage more with front-line workers about the necessary changes. The company has previously said it would adopt technology to prevent collisions of mobile equipment and better manage worker fatigue.

A worker was killed in July at Suncor’s northern Alberta Base Plant mine, the fifth fatality at a Suncor site since 2019, when Little became CEO, and the thirteenth since 2014, by far the worst safety record among Canadian oil producers.

The company also continues to struggle with operations. It lowered its full-year production guidance on Thursday, and Smith said operational problems at Base Plant continue into the current third quarter.

Even so, Suncor posted a more than fourfold jump in its second-quarter profit on Thursday, as the oil producer benefited from a rally in commodity prices.