Suncor (SU) CEO Reaffirms Commitment to Decarbonization Efforts
Suncor Energy Inc. (SU), a Calgary-based integrated energy company, reaffirmed its dedication to reducing carbon emissions and advancing the decarbonization of its existing energy ventures,in a recent appearance before the Canadian parliament's natural resources committee. The statement comes after concerns were raised over SU’s CEO Rich Kruger's earlier remarks that suggested a potential backtrack on the company's environmental commitments.
Kruger addressed a Canadian parliamentary committee in Ottawa, providing insights into Suncor's climatic strategy. He acknowledged the necessity of a strong oil business to facilitate a smoother transition toward cleaner energy forms in the long term.The company is pinning its hopes on carbon capture and storage technologies, as well as efficiency measures, to achieve its objectives.
In August, Kruger had mentioned a "disproportionate emphasis" on the longer-term transition from oil and gas. This drew criticism from environmental groups and disappointment from Canadian Environment minister Steven Guilbeault. However, Kruger clarified that the company's objective of achieving net-zero emissions by 2050 remains firm. Suncor will focus on decarbonizing oil production and expanding its renewable fuel ventures.
Environmental Defence, an advocacy group, labeled Kruger's testimony as "greenwashing." Additionally, Greenpeace lodged a complaint with the Alberta Securities Commission last week, alleging that Suncor had removed warnings to investors from its 2023 climate report regarding the potential devaluation of oil sand projects in a low-carbon world. Kruger addressed this concern by asserting that such warnings were indeed disclosed in a different section of the filing.
Canada ranks as the fourth-largest global crude producer, with its oil and gas sector standing as the highest-emitting industry in the country. Kruger emphasized the critical need for policy certainty to facilitate major investment decisions, asserting the importance of a stable regulatory environment. He expressed concerns over the existing unpredictability and uncertainty in Canadian energy policy, which he believes deters capital investment.
Zacks Rank & Key Picks
Suncor currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are Matador Resources Company MTDR and Pioneer Natural Resources Company PXD, each currently sporting a Zacks Rank #1 (Strong Buy), and Diamondback Energy Inc. FANG, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador Resources is among the leading oil and gas explorers in the shale and unconventional resources in the United States. The company’s prime intention is to create more value for shareholders and generate lucrative returns from the capital invested in unconventional plays. MTDR has witnessed an upward earnings estimate revision for 2024 over the past seven days.
Pioneer Natural Resources is a leading upstream energy firm with primary operations in the Permian basin, which is among the lucrative oil shale plays in the United States with fewer risks. Its total holding of more than 1 million net acres in the Permian basin will support long-term oil production growth. PXD has witnessed an upward earnings estimate revision for 2023 and 2024 in the past 30 days.
Diamondback Energy is an independent oil and gas exploration and production company with its primary focus on the Permian Basin, where it has around 491,000 net acres. With an attractive production profile, favorable industry trends and FANG’s low breakeven economics, the margin of safety on investment is likely very high. The company has witnessed an upward earnings estimate revision for 2023 in the past seven days.
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