Suncor Energy on Track to Realise Efficiency Targets From Merger With Petro-Canada
Suncor Energy Inc. reported today that it is on track to meet or exceed operating and capital efficiency targets following the company's merger with Petro-Canada. When the merger plan was announced in March, the companies estimated that the combination would yield annual reductions of $300 million in operating expenditures and $1 billion in capital expenditures.
"One month after close, we are already seeing significant savings through integration of our product marketing logistics and economies of scale in our supply chain," said Rick George, president and chief executive officer. "Unfortunately, bringing two large businesses together has also meant that some of the efficiencies are necessarily through workforce reductions. It's been difficult, but we've said from the start that this would be the case and worked hard to keep employees informed and to move quickly to build the new organisation."
Company-wide, Suncor expects a total of approximately 1,000 people will leave the company by mid-October through layoffs, retirements and discontinuation of contract positions. The majority of these layoffs have already occurred and Suncor has committed to inform employees of their status, including movement into new jobs and confirmation of existing positions, by mid-September.
Suncor and its UK subsidiary have issued a proposal that responsibility for managing the company's international and offshore business will move to Calgary from London. This proposal and resulting staffing decisions are subject to a consultation period of up to 90 days as required by United Kingdom legislation.
"With our new organisation largely in place and our review of investment opportunities well underway, we expect to be in a position to begin translating strategy into action later this year," said George. "In the mid to longer-term, that will mean more investment in Canada's economy than either Petro-Canada or Suncor could have accomplished individually. We expect the benefits of this merger to become increasingly clear to our shareholders, business partners and Canadians."
Since the close of the merger on August 1, Suncor has been reviewing its portfolio of potential growth projects to determine the best opportunities and optimal timing of projects to be developed based on expected rates of return, near-term cash flow potential and business risk.
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