CALGARY — Suncor Energy Inc. is not interested in selling off its Petro-Canada retail network, the oil giant’s chief executive said Tuesday, in spite of pressure from an aggressive activist investor.
Speaking publicly for the first time since U.S.-based Elliott Investment Management called for changes to Suncor’s board and a review of its executive leadership as well as the possible sale of Petro-Canada, company CEO Mark Little told analysts that the 1,800-location retail chain is a key element of Suncor’s business.
“It’s intertwined with our wholesale and industrial business as well,” Little said during a conference call to discuss the company’s first quarter financial results.
“(Petro-Canada) is a very strong performer and can go head-to-head with other retail businesses … We think we have the best downstream business in North America, and we think it’s important that it stays together.”
The recent proposal by Elliott — a well-known activist investor that holds a 3.4 per cent economic interest in Suncor and which has a track record of targeting large corporations it views as underperformers — had the Calgary-based oil producer on the defensive on Tuesday’s call.
Elliott has been critical of Suncor’s lagging share price as well as a recent spate of operational difficulties and workplace safety incidents, and analysts wanted to know how the company is responding to these concerns.
But Little pointed to Suncor’s first quarter profits of $2.95 billion in the first quarter — up from $821 million in the same period of 2021 — as well as the highest quarterly cash flow in the company’s history as proof that Suncor is on the right track.
“While we still have work to do, I’m pleased to report that we’re making progress and that all parts of Suncor are shifting into high gear,” Little said.
“Our board and management have great confidence in our plan and the progress we’re making.”
On Monday, Suncor declared a quarterly dividend of 47 cents per common share payable June 24 to shareholders of record as of June 3. The company says the dividend is the highest in the company’s history and 12 per cent higher than the previous quarter’s dividend.
The company’s net earnings amounted to $2.06 per common share, compared to 54 cents per common share in the first quarter of last year.
Revenues were $13.5 billion, up from $8.6 billion in the prior quarter.
Suncor reported total upstream production of 766,100 barrels of oil equivalent per day (boe/d) in the first quarter of 2022, compared to 785,900 boe/d in the prior year quarter.
Refinery crude throughput increased to 436,500 barrels per day and refinery utilization was 94 per cent in the first quarter of 2022, compared to 428,400 barrels per day and 92 per cent in the prior year quarter.
This report by The Canadian Press was first published May 10, 2022.
Companies in this story: (TSX:SU)
Amanda Stephenson, The Canadian Press
Hot rental market makes search ‘stressful’ for many — and it won’t get better soon
Marissa Giesinger is pictured in Calgary, Thursday, Sept. 21, 2023. On the hunt for a rental home in Calgary over the last six weeks, Giesinger and her boyfriend trawled through listings morning, noon and night, only to find most come along with dozens of applications and a steep price tag. THE CANADIAN PRESS/Jeff McIntosh
By Tara Deschamps in Toronto
On the hunt for a rental home in Calgary over the last six weeks, Marissa Giesinger and her boyfriend trawled through listings morning, noon and night, only to find most come along with dozens of applications and a steep price tag. As an added difficulty, many landlords are unwelcoming to the couple’s brood — dogs Kado and Rosco and a cat named Jester.
“We made the tough decision recently to house our dogs with someone else until we can find a place that’s affordable and we can take both of them,” said Giesinger, a 23-year-old Mount Royal University student.
“It’s definitely been stressful.”
The competitive rental market Giesinger has encountered in Calgary is being seen across the country as multiple factors combine: high interest rates deter buyers and add to rental demand, still-high inflation is squeezing renter budgets, there’s an undersupply of purpose-built rental units and population growth is fuelling demand.
These conditions have left prospective renters feeling even more frustrated than usual by sky-high rents, the frenzy of interest that surrounds any affordable listing and the litany of demands landlords can make when so many people are interested in their home.
Giacomo Ladas, communications director for Rentals.ca, calls it “almost a perfect storm” — and it isn’t likely to ease up any time soon.
“What this does is create such a burden on this rental housing market that even though we’re out of the (busy) summer rental season, there’s so much demand that (these conditions are) going to continue like this until the fall and into the winter,” he said.
Data crunched by his organization and research firm Urbanation.ca shows average asking rents for newly-listed units in Canada increased 1.8 per cent between July and August and 9.6 per cent from a year earlier to reach a record high of $2,117 last month.
Between May and August, asking rents in Canada increased by 5.1 per cent or an average of $103 per month.
When Giesinger rented a two-bedroom basement unit with a roommate a few years ago, the duo paid $1,000 per month, but now she routinely spots “super tiny,” one-bedroom places for $1,350 a month.
“If you want a basement suite or an apartment, you’re looking at minimum $1,200 and that doesn’t include any utilities or anything like that unless it’s a super rare listing,” Giesinger said.
Rentals.ca data show newly listed one-bedroom properties in Calgary priced at an average $1,728 per month in August, up 21.6 per cent from a year earlier. Two-bedroom homes have climbed 17.4 per cent to $2,150 over the same period.
The picture in Vancouver and Toronto is far bleaker. Rentals.ca found the cities had the highest rents in the country.
Newly-listed one-bedroom properties in Vancouver averaged $2,988 in August, up 13.1 per cent from a year earlier, while two-bedroom units hit $3,879, an almost 10 per cent increase year-over-year.
Newly-listed Toronto one-bedroom homes averaged $2,620 in August, up almost 11 per cent from the year before, while two-bedroom properties had a 7.1 per cent rise over the same time frame to $3,413.
It’s numbers like these that have convinced Kanishka Punjabi to abandon her hopes of moving in the near term.
“Two days ago, I gave up on my search because the rental market is that bad,” she said.
The public relations worker has been living in Mississauga, Ont., but felt it was time to find a home in downtown or midtown Toronto, closer to where she works.
However, few of the two-bedroom homes she spotted in her two-month search were within her $2,800 budget.
For example, one apartment she liked at the intersection of Yonge and Eglinton streets had 25 offers in just over a week.
“Some people actually just sent in their offer without looking at the apartment too because there are so many people who are in desperate need of rental units,” said Punjabi. “There’s just not enough.”
The Canada Mortgage and Housing Corp. has projected that the country needs to build 3.5 million additional homes beyond what’s planned before the market reaches some semblance of affordability.
It also calculated that the annual pace of housing starts — when construction begins on a home — edged down one per cent in August to 252,787 units compared with 255,232 in July.
Despite the nudge down, Rishi Sondhi, an economist with TD Bank Group, said it has been a strong year for starts because the industry is responding to elevated prices by building at a robust pace.
But between population growth and rising interest rates, he said, “supply is struggling to keep up with demand” and that’s bound to weigh on renters for quite some time.
“In the short term, it would be unrealistic to expect too much of a reprieve simply because population growth is likely to remain strong through the duration of this year — and that’s really one of the big fundamental drivers,” he said.
“In addition, it’s unlikely to expect affordability in the ownership market to improve too much either because we think the Bank of Canada (key rate) is going to be on hold for the remainder of the year, but there is some risk that they take rates even higher, especially if inflation doesn’t co-operate.”
For renters like Giesinger that message puts even more pressure on her to settle on a place soon.
“Now I’m scrambling to find the money for a deposit and we’re still never really sure like what kind of place we’re going to get,” she said.
“And when you’re battling dozens of other people for a rental it can be super stressful.”
This report by The Canadian Press was first published Sept. 24, 2023.
Alberta is getting serious about nuclear power
Image from CanadianMiningJournal.com
New funding to study small modular reactors
Alberta has approved funding for a multi-year study that will explore how small modular nuclear reactors could be safely, technically and economically deployed for oil sands operations.
Alberta is investing $7 million from the Technology Innovation and Emissions Reduction Fund to help Cenovus Energy study how small modular reactors could be used in northern Alberta, and what additional information might be needed to pursue regulatory approval in the future.
As outlined in the province’s Emissions Reduction and Energy Development Plan and A Strategic Plan for the Deployment of Small Modular Reactors, Alberta is committed to responsible and innovative energy development, and small modular reactors have the potential to provide zero-emissions energy and further reduce emissions from Alberta’s oil sands in the years to come.
“A few years ago, the idea of expanding nuclear energy use was on the back burner – that is no longer the case. In Alberta, small modular nuclear reactors have the potential to supply heat and power to the oil sands, simultaneously reducing emissions and supporting Alberta’s energy future. This funding is the foundation for that promising future. I want to thank Cenovus Energy and Emissions Reduction Alberta for their leadership in this work.”
Small modular reactor technology involves scalable and versatile nuclear reactors that could potentially supply non-emitting heat and power to the province’s oil sands. Provincial funding delivered through Emissions Reduction Alberta is supporting the work needed to determine how this technology could be effectively used in Alberta.
“Small modular reactors have great potential to supply non-emitting energy in many different applications, including the oil sands. Further studies like this are needed to see if the technology is suitable for those industrial applications. If so, it could be transformational for the in-situ oil sands sector and other sectors in Alberta.”
“This enabling study is a great example of the collaborative approach we’ll need to help us reach our ambition of net-zero emissions from our operations by 2050. We’re exploring multiple technologies that would help significantly reduce our emissions, and small modular reactors show potential. This study will help us understand if this possible solution is economical and technically viable.”
Cenovus Energy’s $26.7-million enabling study will look at whether small modular reactor technology could be applied to steam-assisted gravity drainage projects in the oil sands, which drill into the reservoir and inject steam to soften the oil. Alberta Innovates recently released a study on the feasibility of using small modular nuclear reactors in steam-assisted gravity drainage operations, which is an early step to see if this technology could be part of Alberta’s long-term solutions to reducing emissions from industry operations. While there is currently no project being planned, this study frames the discussion around what is possible in the years ahead.
“Building off the work previously supported by Alberta Innovates, the success of Cenovus’s small modular reactor ERA-funded enabling study could provide substantial economic and environmental advantages throughout Alberta’s industrial sector, helping to advance a clean energy future for Canada.”
- Funding for this project comes from Emissions Reduction Alberta’s Industrial Transformation Challenge.
- Any future adoption of small modular reactor technology in Alberta would require an extensive regulatory and engagement process. The province is currently working to ensure the regulatory framework is in place and ready should private industry pursue this technology.
- On Sept. 12, an Alberta-Ottawa working group on emissions reduction and energy development met for the first time. The working group agreed to commence the development of a regulatory framework for small modular reactor technology and continue work on federal and provincial incentives for CCUS, hydrogen and other emissions-reducing technologies.
- Alberta, Saskatchewan, Ontario and New Brunswick released A Strategic Plan for the Development of Small Modular Reactors in 2022. The plan commits the Alberta Utilities Commission and Alberta Energy Regulator to deliver findings on areas of overlap, uncertainty and duplication between the federal and provincial regulatory systems to Alberta’s government in 2023.
- The Canadian Nuclear Safety Commission regulates all stages of life of nuclear power plants in Canada, starting from the initial environmental assessment to decommissioning. The approval process takes several years and offers opportunities for public participation.
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