CALGARY — Rick George, who’s retiring as CEO of Suncor Energy Inc., says it took a certain appetite for risk-taking to usher his company to the top of Canada’s oilpatch.
George will hand the reins to chief operating officer Steve Williams at Suncor’s annual meeting in May, after pioneering what was once an experimental oil-extraction technology into one of the country’s most important industries.
“I’ve been in the chair over 20 years. At the time I retire, it’ll be 21. That’s a great run,” George told reporters on Thursday.
“If you think back to 1992, when we went public, we had a market cap of $1 billion, and today this enterprise is $50 billion. There’s not many people who get the chance to lead an organization through that,” said the 61-year-old.
Suncor is the oldest operator in the oilsands, having started the first commercial project there in 1967. In the early 1990s, George said it was necessary to “fix” its oilsands operations — find ways to more profitably extract the gooey bitumen from sand and clay in northern Alberta.
He said focusing on the oilsands, the third-largest proven oil reserve in the world, was a matter of survival, since Suncor wasn’t going to get the growth it needed with one refinery, a handful of gas stations in Ontario and a “middle-of-the-road” exploration and production business.
“If you don’t take risk, if you don’t make those tough decisions, you never get anywhere. Listen, we took some big risks in Suncor, particularly in the early days,” George said.
He recalls when Suncor began building its massive Millennium mine in 1999, crude oil was a paltry US$5 per barrel.
“Not anyone necessarily thought that was a wise decision, and it worked out to a charm, and it’s one of the reasons that we’re here today.”
Arguably the biggest milestone for Suncor was its $19-billion merger with former Crown corporation Petro-Canada in 2009. That transaction propelled Suncor to its status as Canada’s biggest energy company.
“The merger with Petro-Canada seems like it’s a long ways in the rearview mirror. It’s the biggest, but I would also say the most successful, merger in the history of this country,” said George.
But some have said the integration of the two companies did not go as smoothly as it could have, and Suncor’s stock has been a laggard versus its peers.
“If you thought about where Suncor was at the time of the merger, which is two and a half years ago, and you think of where we are today, we are very happy with this transition,” said George.
“You can blame us for a lot of things, but you can’t blame us for what’s going on in Europe or in the stock market.”
George said his plan to hand off the reins to Williams — a 10-year veteran of the company who has been chief operating officer since 2007 — has been in the works for several years.
Williams, 55, said he has big shoes to fill.
“And although I come into this with some trepidation, I think overall I’m excited about where we are today, and looking forward to the opportunities and challenges we have to come,” said Williams.
“I think we’ve set the tone with our stakeholders, with our opponents,and communities for listening and working together to come up with solutions into the future, not just problems.”
There won’t be any major changes to the way Suncor operates in the future, Williams said.
CIBC World Markets analyst Andrew Potter saw a changing of the guards taking place at Suncor some time in the next few years, but the changeover took place earlier than he’d expected.
“While Rick George will be missed by the market, Steve Williams is a very solid replacement. He has been Suncor’s COO since 2007 and has been instrumental in leading the focus on improving operational reliability over the past few years,” Potter said in a note to clients.
George, who was born in Colorado, said he and his family are proud Canadian citizens who intend to remain “deeply involved in Canadian life” once the transition is complete.
And he said he’s not ready to disappear from the oilpatch entirely.
“To be honest with you, you’re going to see me still stay involved in the oilpatch, both from a personal investment and from a leadership view point,” he said.
“It’ll be with much smaller companies, but you haven’t gotten totally rid of me. I’m going to kind of do some work on technology and some smaller companies.”
When pressed further, he said: “let’s talk about it in May.”
George was named “Outstanding CEO of the Year” in 1999 and received the Canadian Business Leader Award in 2000. George also was appointed an Officer of the Order of Canada in December 2007 for his leadership in the development of Canada’s energy sector and his efforts to provide business opportunities to natives and on sustainable energy development.