Interview by Tom Keyser
When Colorado-born Rick George took over as chief executive of oilsands giant Suncor Energy in 1991, it was an underachieving team with less-than-stellar prospects. He took the company public the following year, with a market capitalization of about $1 billion. Today, Suncor’s capitalization is closer to $30 billion and provided regulators approve its merger with Petro-Canada (expected later this year), the reborn Suncor will be Canada’s largest energy company by any measure, including revenues, boasting a market cap of $46 billion. Respected by analysts for the strength and consistency of his vision, George is a superb communicator who’s known to ride public transit or his Harley Davidson to the office. He is also a lifelong outdoorsman who desperately hopes to find time to get away for a week of stress-busting fly-fishing before summer’s end.
AV: What are Suncor’s priorities for growing output in the oilsands now that you have added Petro-Canada’s assets to the mix?
RG: I think we will have a very strong company with very good cash flows and a good balance sheet. Then if you look at the asset base, the main goal is how do we monetize that 26 billion barrels of resource owned by Suncor up north. Between the assets that Petro-Canada brings to the party and what Suncor brings in terms of upgrading, open-pit mining and Firebag [in-situ extraction], that will be the centrepiece of this new company. What I see on a go-forward basis is a period of time where we will get back to growth at a much steadier pace than the flurry of activity we’ve seen in this industry the last five or six years.
Can Suncor afford to expand in an environment of low oil prices, to take advantage of lower building costs?
The whole industry is still in a bit of shock in terms of how quickly the current downturn happened. So it takes a while to work those costs out. When we talk about lower costs, we talk about two things: construction/capital projects and operations. On the construction side, we’re optimistic that we’ll be able to achieve lower-cost projects, in terms of the materials we order, engineering and productivity in the field. As we head into 2010-11, we should be able to achieve a minimum 25% reduction in cost on the construction side. On the operating side, we’re shooting for a 10% to 15% reduction. That might be a bit tougher to achieve.
Is there still such a thing as an Alberta Advantage?
I do think we’ve lost our way a bit. If you think back to the royalty review and the negative sentiment around that, it really was totally unnecessary, in terms of the rhetoric that surrounded it. The government should periodically schedule royalty reviews to make sure the citizens of Alberta are getting their fair share, no question. But the last one was handled in a negative way. In this province, we’ve always had the ability for business to work with government and the rest of society to make this province work. Somehow, it’s turned into a little bit of us versus them. That’s not helpful. We have to get back to an understanding of what drives this province, how we can create jobs, how we make sure to keep the young people engaged in the workforce.
How do you see climate initiatives playing out in the United States and how will that affect oilsands producers?
We take our strategies, values and beliefs seriously in terms of our obligations to continue to improve our performance with regard to [conservation] of air, land and water. I think that’s what people expect – not an industry that’s perfect but one showing continuous improvement, using technology to reduce its environmental footprint. Since 1990, [Suncor’s] CO2 production is down some 40% and our water use is down almost 50% in the last five years [per barrel of oil produced]. That’s what the public and our stakeholders expect.
Do you have a favourite place or activity that lets you get away from it all and gain some perspective, especially at a time like this?
I’ve always done outdoor things. I did a lot of camping, hiking and fly-fishing with my dad. Now I do them with my sons and hope to do the same with my grandsons – a long-standing family tradition. If you’ve done a lot of that kind of thing, it fosters a respect for nature. You learn from an early age to leave a campsite cleaner than you find it and that sticks with you.
Tags: 50 Most, Alberta's 50 Most Influential, Management, Rick George
Posted in Alberta Business | |
Who, over the past 12 months, created the largest company in Canada? Who shook up the health care system? Who dined with a newly civilian George W. Bush? Who sparked a medal haul in Beijing? With this, our 13th annual list of the province’s movers and shakers, we round up the business people, politicians, do-gooders, rabble-rousers, athletes, academics, artists and other overachievers who are giving Alberta a face and a voice for the 21st century.