CALGARY, Alberta (Reuters) - Suncor Energy (SU.TO) said on Thursday that Chief Executive Rick George will retire in May, 21 years after taking charge of the company he turned from a small, unprofitable oil sands developer into Canada’s largest oil and gas producer.
George will be replaced by Steve Williams, Suncor’s chief operating officer, at the company’s May annual meeting. Williams was also appointed the company’s president on Wednesday and given a seat on the board of directors.
While George’s retirement was unexpected, he said succession plans have been in place for years and he is ready to leave.
“I‘m 61 years old today and been in the chair over 20 years,” George told reporters. “That’s a great run ... I think its just a natural progression, one that should take place and there’s no perfect time, but today is as good a day as any.”
Under George, Suncor’s value grew from less than C$1 billion ($983 million) in 1992, when the company took its small oil sands operation, a refinery and regional gas station chain public in 1995, to nearly C$50 billion now.
Suncor is the dominant producer in the oil sands, with plans to nearly double output to one million barrels a day by 2020. It owns refineries in Ontario, Alberta, Quebec and Colorado, has offshore operations in Newfoundland and the North Sea, and produces oil and gas in Libya and Syria.
”Taking (Suncor’s value) to C$50 billion was an incredible achievement, Williams told reporters. “My challenge has to be to take it up to C$100 billion.”
Williams, 55, a one-time Exxon Mobil Corp (XOM.N) manager who came to Suncor from Octel, a British specialty chemical company. He’s credited with improving the reliability of Suncor’s oil sands operations following a series of fires that cut into production and disenchanted investors.
”I think the company is being left in really good hands,“ said Garey Aitken, chief investment officer at Bisset Investment Management, which controls more than 2.5 million Suncor shares. ”From what I’ve seen, Steve’s a capable person, the right person.
George, a Colorado native, took over as Suncor’s chief executive in 1991 after 10 years at Sunoco (SUN.N). Suncor was spun off by Sunoco in 1995.
He’s best known for making big bets: The first was in 1998 when Suncor decided to double the size of its oil sands operations despite oil prices that had plunged below $15 a barrel; but the biggest was in 2009, when George launched a C$22.7 billion ($22.33 billion) acquisition of Petro-Canada in the midst of a recession.
“He’s created the foremost oil sands company in Canada, if not the world,” said Barry Schwartz, vice-president and portfolio manager at Baskin Financial Services, which manages Suncor shares. “The crowning achievement in his career was acquiring Petro-Canada. He’s help create a world giant, a company with 40-plus years of reserves in the ground that will continue expanding.”
Though George said that Suncor expects record profits and cash flow this year, the company’s shares have been poor performers, dropping 20 percent since the start of the year, more than the 16 percent fall in the Toronto Stock Exchange’s energy index.
“You can blame us for a lot of things but you can’t blame us for what is going on in Europe or the stock market,” he said. “This company is an amazing company and the fact that it hasn’t gotten the recognition from the stock market is something I don’t feel great about, but if we just post results it will happen.”
George is credited with improving the operations and profitability of Suncor’s then-small and experimental project in the oil sands of northern Alberta, which was producing 58,000 barrels of crude a day when he arrived 20 years ago. He introduced the truck and shovel production methods, replacing expensive draglines, that have since become an oil sands mining standard.
While George proved the viability of operations in the oil sands - the world’s third-largest crude reserve and the largest source of imported oil in the United States - development of the resource has also spurred environmental fears. Green groups say the exploitation of the tar-like bitumen spews too much carbon dioxide and threatens northern Alberta’s pristine boreal forest.
Suncor’s shares fell 17 Canadian cents to C$30.55 on the Toronto Stock Exchange.
($1 = $1.02 Canadian)
Additional reporting by Euan Rocha in Toronto; editing by Peter Galloway and Rob Wilson