Suncor reducing contractor workforce by 20% to improve safety, efficiency

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Suncor Energy Inc. is reducing the scale of its contractor work drive by 20 per cent as a part of its effort to improve security and efficiency at its oilsands operations.

Interim CEO Kris Smith advised analysts on a convention name Thursday that greater than half of the workforce reductions have already been accomplished, with the rest on monitor to be accomplished by the primary half of 2023.

He mentioned the choice to scale back the variety of contractors engaged on Suncor websites was the results of “an intensive overview of the make-up of our front-line workforce” and aimed toward reducing the variety of publicity hours that put the corporate in danger for office accidents or fatalities, in addition to enhancing efficiency and competitiveness.

“My precedence has been to take away distraction from the group and to focus our staff on protected, dependable operations in our greatest alternatives,” Smith mentioned on the decision.

Suncor’s security document has been beneath the microscope in 2022, ever since U.S.-based activist investor Elliot Investment Management publicly referred to as for change on the Calgary-based vitality firm.

Since 2014, there have been at the least 12 fatalities at Suncor’s oilsands amenities in northern Alberta, together with 5 since 2021. That’s greater than all of its trade friends mixed.

Smith stepped into the CEO function in July to change Mark Little, who stepped down from the highest job someday after a 26-year-old contract employee was struck by tools and killed at Suncor’s Base Mine.

He mentioned Suncor can be enhancing its contractor administration processes, and partnering with consultants to guarantee managers in all departments and operations have the most recent security coaching and schooling.

The firm can be putting in collision prevention expertise on over 1,000 items of cell mine tools to get rid of what it calls a “key danger” inside its operations. Fatigue administration techniques will even be accomplished throughout all of Suncor’s mines by early 2023, Smith mentioned.

On Wednesday night, Suncor reported a internet lack of $609 million within the third quarter, the results of taking a $3.4-billion writedown in opposition to its share of the Fort Hills oilsands mine.

The internet loss, which works out to 45 cents per frequent share, is in distinction to an $877-million revenue, or 59 cents per frequent share, within the prior yr’s quarter.

Suncor shopping for Teck’s stake in Fort Hills

Suncor introduced final week it’ll purchase out Teck Resources Ltd.’s 21.3 per cent stake within the Fort Hills oilsands mission for about $1 billion. The agreed-upon gross sales value displays a decrease market worth for the mine, leading to a non-cash impairment cost.

On an adjusted foundation, nonetheless, Suncor mentioned it earned $2.6 billion for the three months ended Sept. 30, or $1.88 per share, greater than double the $1 billion or 71 cents per frequent share it earned on an adjusted foundation in the identical three months of 2021, thanks to considerably increased crude oil costs and upstream manufacturing.

Suncor’s whole upstream manufacturing elevated to 724,100 barrels of oil equal per day (boe/d) within the third quarter of 2022, in contrast to 698,600 boe/d within the prior yr’s quarter. Refinery crude throughput was 466,600 barrels per day and refinery utilization was 100 per cent within the third quarter of 2022, in contrast to 460,300 barrels per day and 99 per cent within the third quarter of 2021.

Suncor has mentioned it’ll maintain an investor presentation on Nov. 29 to present extra details about its plans to improve security and efficiency, in addition to the outcomes of its overview wanting into the doable sale of its retail division.

Suncor, which not too long ago offered its wind and photo voltaic belongings in addition to its exploration and manufacturing belongings in Norway, is making an attempt to streamline its portfolio to concentrate on its “core enterprise.”

Eight Capital analyst Phil Skolnick mentioned that would imply Suncor is about to embark on an oilsands “shopping for spree.” He mentioned within the aftermath of the deal to purchase Teck’s share in Fort Hills, he would not be stunned if Suncor can be in negotiations with French firm TotalEnergies SE for its remaining 24.6 per cent stake within the Fort Hills mission.

“We may additionally see (Suncor) wanting to purchase CNOOC and Sinopec’s mixed 16.2 per cent curiosity in Syncrude (China has been reported to be wanting to exit Canada),” Skolnick mentioned in a analysis word.

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