Suncor CEO: 1,700 jobs cut in 2015, company ‘overachieved’ on cost cutting

The CEO of Canada's biggest oilsands player says about 1,700 jobs were shed over the past year or so — far surpassing its original target.

CALGARY — The CEO of Canada’s biggest oilsands player says about 1,700 jobs were shed over the past year or so — far surpassing its original target.

Just over a year ago, Suncor Energy (TSX:SU) announced it would be cutting 1,000 jobs because of the sharp downturn in crude prices.

“We significantly overachieved,” CEO Steve Williams said on a conference call with analysts on Thursday to discuss Suncor’s fourth-quarter results.

About 1,900 contractor and full-time employee positions were cut. But Suncor was able to move about 200 to 250 of those to work on projects under construction, mainly the Fort Hills oilsands project north of Fort McMurray, Alta., to bring the net reduction to about 1,700.

Williams said no more job cuts are anticipated this year, with further cost cuts coming from improving processes and leaning on suppliers.

Suncor posted a $2-billion net loss for the final three months of 2015, due to the crude price collapse, writedowns and a foreign-exchange loss related to debt denominated in U.S. dollars.

A year earlier, it posted a net profit of $84 million.

West Texas Intermediate crude prices averaged US$41.15 for the fourth quarter of 2015 versus US$73.15 in the prior-year quarter. The picture has since worsened, with WTI at around US$33 a barrel on Thursday.

Suncor had a quarterly operating loss — removing the impacts of unusual items — of $26 million, versus an operating profit of profits of $386 million a year earlier.

It’s lowering its spending plans for 2016, with a capital budget of between $6 billion and $6.5 billion compared with the $6.7 billion to $7.3 billion range it set in November.

Despite the fact that virtually all oilsands projects are losing money at current oil prices, Williams said Suncor is not ruling out more acquisitions.

Suncor launched a hostile takeover for Canadian Oil Sands in October in a battle that became nasty at times. But the two companies reached a friendly deal in January that’s worth $6.6 billion, including the target company’s debt.

An analyst asked Williams whether Suncor would stop at COS, or look to buy out other oilsands players like MEG Energy (TSX:MEG) or Cenovus Energy (TSX:CVE)

He said there are no specific plans in the works, but that Suncor would weigh any opportunities that may arise. The crude rout has battered the share prices of energy firms, making them available at bargain prices.

“I’m not going to tell you that we welcomed these much lower for much longer prices, but what I would say is that we see this period as just as much an opportunity as a threat,” Williams said.

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