TRUDEAU, NOTLEY MEETING ‘ ENCOURAGING’ TO OILPATCH
Shortly before Steve Williams and other top oil and gas CEOs met with Prime Minister Justin Trudeau and Alberta Premier Rachel Notley to seek help for the battered industry, the chief executive at Suncor Energy told analysts Canada’s largest energy company had “significantly overachieved” in its plans to cut 1,000 workers last year.
In discussing a fourth quarter in which Suncor posted a $ 2- billion net loss, the always quotable Williams commented Thursday that “we significantly overachieved and took over 1,900 people out.”
It may have been prudent business for the company, given the plunge in oil prices — the net job losses amounted to 1,700 people as Suncor was able to redeploy 200 to 250 workers — but adding to the growing number of unemployed workers in Alberta is hardly an achievement any place other than on a corporate bottom line.
In contrast, Williams told analysts Suncor believes it will be able to “protect” its dividend payments to shareholders.
The comments came off as cavalier, given Williams has made the point Suncor is sitting on a pile of cash of more than $ 4 billion. At a minimum, the off- the- cuff remarks were an unfortunate choice of words for an industry leader.
A day earlier — during the Edmonton portion of Trudeau’s two- day visit to Alberta — Notley had pushed for changes to federal employment insurance to increase access to benefits for laid- off workers in a province with an unemployment rate that has surged to 7.0 as tens of thousands of people in the oil and gas sector have seen their jobs eliminated.
The Calgary discussions with Williams and top executives from Imperial Oil, Canadian Natural Resources, Encana, Cenovus Energy, Royal Dutch Shell, Husky Energy and others in the service sector focused on the depressed price of oil and the industry’s need for pipelines to tidewater ports to move Canadian crude oil and natural gas to lucrative overseas markets.
Trudeau’s recently elected government introduced measures last week that will extend the current regulatory reviews for the Energy East and Trans Mountain oil pipeline projects and they’ll now factor in the effects of greenhouse gas emissions from producing the oil that flows through the pipeline.
Interestingly, Trudeau said one of the main concerns he heard Thursday from the oilpatch executives was over jobs.
Williams called the meeting “very encouraging.”
“What we got today was an understanding of the challenges we face,” he said. “We clarified some of the challenges in front of us with the price cycle, with market access, and we talked about some potential solutions.”
Notley said she’s been clear with Trudeau on how important pipelines and market access are to the province.
Job creation was a major plank in Notley’s election campaign last spring and oilpatch layoffs have become an overriding issue since her NDP government was elected in May. In October, Notley expressed concern for “the strain and the stress and the anxiety that job losses mean for families, for their neighbours and for the communities in which those people live.”
Williams in no way meant to be disrespectful during the call with analysts, said Suncor spokeswoman Sneh Seetal.
“Decisions about people were not easy ones for Steve and the leadership team to make, which is why they looked for as many redeployment opportunities as possible,” she said. “These decisions were not easy, nor were they taken lightly and I regret that there is the perception out there that they were.”
Williams, a chemical engineer from Bristol, England, is known for speaking his mind.
After Suncor launched a hostile bid for Canadian Oil Sands last fall, he got into a heated war of words with COS chief executive Ryan Kubik. At one point, Williams wrote to shareholders of Suncor’s takeover target with an assessment of its management that “we don’t think hope is an appropriate strategy.”
Hardly an outcast in the industry, Williams is also one of biggest champions of the Canadian Oil Sands Innovation Alliance, in which producers co- operate to advance technology to lower costs and reduce environmental footprint.
In response to the downturn, Suncor will cut its 2016 spending more than 10 per cent from the original plans and its capital budget will be between $ 6 billion and $ 6.5 billion.
Williams said it’s likely near the end of the cuts for Suncor’s 13,000 employees, and given the talks with Notley and Trudeau that would be a far more significant “achievement” for Alberta and Canada.
We clarified some of the challenges in front of us with the price cycle, with market access, and we talked about some potential solutions.