Suncor to keep Petro-Canada stations in opposition to activist investor

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But he says he will ‘improve and optimize’ Petro-Canada

A Petro-Canada gas station in Alberta. Photo by David Bloom/Postmedia

Suncor Energy Inc. said it would keep its network of Petro-Canada gas stations, a potential rebuff for activist shareholder Elliot Management LP, which has campaigned for an overhaul of the oilsands stalwart, including a possible sale of Suncor’s retail business.

But instead of a sale, Suncor’s board said a « comprehensive review » prompted it to decide to « improve and optimize » Petro-Canada, promising changes that will allow trade retail to become a greater contributor to Suncor’s bottom line.

« After careful consideration, the Board has concluded that retaining and optimizing the Company’s retail operations will generate the highest long-term shareholder value and, accordingly, has unanimously resolved to retain and continue to optimize the network and expand strategic partnerships for Petro-Canada. businesses that enhance our capabilities and capture opportunities for increased revenue and cash flow,” Board Chairman Mike Wilson said in a November 29 press release. “Petro-Canada is a unique, differentiated and strategic asset because of its strong national network and the best consumer brand and loyalty program in the market. »

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To support retail sales, Suncor said it will also continue to expand businesses that do not involve fuel, including quick service restaurants, convenience stores, loyalty partnerships and energy transition offerings.

The Calgary-based company said its review weighed several options for Suncor after Elliott pressured the company to sell the gas station chain this summer. The board committee analyzed existing business and compared peer case studies, while envisioning the future of retail in Canada. He also balanced the pros and cons of selling Petro-Canada.

Elliott released a public letter in April calling for a reshuffle of the Calgary-based oil sands company’s board. The U.S. investor has publicly called for a management and asset review, pointing to Suncor’s poor safety record in recent years, including about 13 workplace fatalities since 2014.

Chief executive Mark Little resigned in July after the death of another Suncor worker at a mine in northern Alberta. The company said in its third-quarter earnings call on Nov. 3 that it would increase safety measures at its oil sands operations by reducing the number of contractors and improving its technology.

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Photo of OliverOliver2022-11-29
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