CALGARY – Suncor Energy Inc. is not looking to increase its stake in the Syncrude Canada Ltd. oilsands mining joint venture beyond its latest expansion.
“We have no explicit ambition to expand our interest in Syncrude,” Suncor president and CEO Steve Williams said Thursday, a day after his company upped its ownership in the project with a $937-million deal to buy Murphy Oil Corp.’s five per cent stake.
That deal is the second Suncor has struck in recent months and pushed the company’s interest in Syncrude, which is nearly adjacent to its own northern Alberta oilsands mines, up to 54 per cent.
Suncor Energy unlikely to start any new major growth projects, CEO saysSuncor takes control of Syncrude in $937M deal for additional five per cent stake
In March, Suncor closed its acquisition of Canadian Oil Sands Ltd., which owned 37 per cent of Syncrude, for $6.9 billion, plus the assumption of $2.6-billion in debt.
Raymond James analyst Chris Cox said in a research note that the price Suncor is paying for Murphy’s stake in Syncrude is similar to what it paid to acquire Canadian Oil Sands.
Even with a majority stake in Syncrude, Suncor will not have direct control over the joint venture.
Williams said Suncor was not looking to become the project’s operator and confirmed the joint venture is structured so that any Syncrude owner, even with a majority stake, would need the support of two other owners to make major alterations, including management changes.
“Our primary objective is to get reliability up into the 90 per cent range and to get the costs down,” Williams said following his company’s annual shareholders’ meeting in Calgary.
The meeting was notable in that 98.1 per cent of Suncor shareholders voted in favour of disclosing more information on the company’s carbon emissions and the risk it incurs as an oil producer if stricter carbon legislation were put in place.
Suncor’s board supported that resolution but urged shareholders to vote against a second resolution, put forth by non-profit SumOfUs.org, to publish annual reports on the company’s lobbying efforts and political donations.
That motion was voted down with 60 per cent of shareholders opposed, and 40 per cent voting in favour.
SumOfUs’s lead campaign strategist Emma Pullman said it went better than she expected. “The industry standard for this kind of motion is 20 to 30 per cent, so 40 per cent is a very encouraging vote,” she said.
PUllman said she is scheduled to have additional meeting with the company to discuss ways in which the company could improve its reporting on lobbying.
“We absolutely agree with the principle of transparency, the problem and the reason we recommended shareholders vote against it, is because of the technical difficulty. It’s a technical issue: we don’t have access to some of the information that’s requested,” Williams said.