Last week, executives at Suncor Energy Inc. had been preparing for an important public presentation, an event they hoped would showcase the company’s plan to improve safety and performance at its oilsands operations, when the news broke: another worker had been killed at the company’s Base Plant Mine near Fort McMurray — the second this year and the fifth workplace fatality since 2020.
About 36 hours later, the presentation was cancelled and Suncor announced that CEO Mark Little had resigned.
In a statement announcing Little’s departure, board chair Michael Wilson addressed the company’s abysmal track record on safety: “Suncor is committed to safety and operational excellence across our business, and we must acknowledge where we have fallen short and recognize the critical need for change.”
Little’s three-year tenure as CEO encompassed a turbulent period for the oilsands major — spanning a historic collapse in oil prices in spring 2020, and then a swift recovery where the company lagged the performance of its rivals, save in one ignominious regard: the relatively high number of Suncor workers or contractors injured or killed on the job.
Last week’s death of a 26-year-old contractor was the 13th fatality for the company since 2014. During the same period, Suncor rivals Canadian Natural Resources Ltd. and Cenovus Energy Inc. saw a combined five deaths, according to data compiled by activist Suncor shareholder Elliott Investment Management LP.
We must acknowledge where we have fallen short and recognize the critical need for change
Michael Wilson, Suncor board chair
“It’s a company that said for the last eight years that it’s going to turn the ship around,” said Sean Tucker, an associate professor of occupational health and safety in the faculty of business at the University of Regina. “That it’s going to implement corrective actions and prevent serious injuries and fatalities from occurring at its operations and it hasn’t been able to do that.”
While Little had only been CEO since 2019, he had been an executive at the company since 2008, including a stint as vice-president for upstream — the part of the business that manages extraction — during a spate of fatalities in 2014. “He’s been aware of the health and safety challenges that Suncor has since before he was president and CEO,” Tucker said. “It’s not like he’s new to this.”
Suncor’s record on safety was also criticized by activist investor Elliott Investment Management LP in a public letter to the company’s board of directors last April. The U.S. firm, which owns a 3.4 per cent stake in Suncor, criticized the company for missed production targets, delayed timelines, and repeated safety failures. It also called for a shakeup at the top with the appointment of five new directors, as well as a review of management and assets.
“It is evident that Suncor’s status quo is not working,” Elliott wrote. The investment firm declined to comment on Little’s resignation Sunday.
Calgary-based Suncor had been the worst-performer among large oilsands producers in Canada for much of the past two years — though the company’s stock has climbed since Elliott disclosed its activist interest in April. The company’s shares closed down 2.14 per cent on the Toronto Stock Exchange Monday at C$41.52.
Analyst Travis Wood of National Bank of Canada said further executive resignations or changes are likely required to achieve a cultural shift at the company.
“There is no easy fix given the complexity of their operations, including the integration of third-party contractors,” Wood wrote in a note Sunday. “The size, scale and integrated nature of Suncor’s operations is another reason we do not believe the blame should fall on one person, leaving us to consider that additional executive changes will likely be required to properly and effectively strike cultural change across Suncor’s (roughly) 17,000 people (including contractors), which is more than (CNRL) and (Cenovus) combined.”
Analysts at Raymond James and Eight Capital downgraded Suncor on Monday following news of Little’s departure and the continued issues with operations and safety at the company.
“This is not about a dividend cut, multiple operational issues, and the inability to meet guidance, all of which (Suncor) has suffered from,” Eight Capital analyst Phil Skolnick wrote in a note. “This is about people risk, and this level of events is something we have never seen in 25 years of covering the sector.”
Suncor has already begun its search to select the company’s next CEO. In the meantime, executive vice-president Kris Smith will serve as interim CEO.
After a worker died and two others were injured at Suncor’s Base Plant Mine on Jan. 6 when a heavy haul truck rear-ended a second truck, Little told a quarterly conference call with analysts that the accountability for safety and operational excellence lies with the CEO.
“I own this,” he said.
In June of last year, a person was killed at the Syncrude mine, and two deaths occurred in December 2020 at the Fort Hills mine.
With additional reporting by Bloomberg News.