(BOE Report) – Canada’s second-largest oil producer Suncor Energy said on Wednesday a recent cost-cutting campaign had set it up well to weather lower global oil prices, but did not rule out reducing capital spending next year if weaker economic conditions persist.
CEO Rich Kruger told analysts on a conference call that Suncor has not changed its 2025 capital budget range of C$6.1 billion ($4.43 billion) to C$6.3 billion, and already planned to spend less – in the range of C$5.7 billion – next year. That 2026 budget will be trimmed if necessary, Kruger said.
“If the business environment warrants that further, that’s exactly what we’ll evaluate,” he said.
Global oil prices hit a four-year low on Monday after the Organization of the Petroleum Exporting Countries and its allies, known together as OPEC+, agreed to another accelerated oil output hike for June.
U.S. President Donald Trump’s unpredictable tariff policies have also been a major drag on oil prices since his inauguration in January.
Kruger said Suncor’s efforts to drive down operating costs and reduce its WTI break-even price over the last two years have resulted in a more resilient company that is better able to ride out commodity price swings.
“What it allows us to do is execute our plans without hitting the gas or jamming on the brakes,” he said.
Calgary-based Suncor’s financial performance – which three years ago significantly lagged that of its peers – has dramatically improved under the leadership of Kruger, who was hired in 2023 to turn the company’s fortunes around.
The company reported first-quarter profit of C$1.7 billion, or C$1.31 per share, on Tuesday that beat analysts’ expectations, and achieved its highest-ever first-quarter production of 853,000 barrels per day.
Suncor also posted its best-ever first quarter for refinery throughput and sales.
Kruger said Suncor’s efforts to increase revenues from its chain of Petro-Canada retail stations – which involve closing some locations and renovations and upgrades at others – were well under way. The company aims to grow earnings from that network by C$200 million by the end of 2026.
Asked on the call if Suncor would ever consider divesting its retail network, Kruger said continued growth from the Petro-Canada chain was another way for the company to hedge against oil price volatility.
“I would never say never, but right now that is a very, very valuable part of the company’s operations,” he said.
(Reporting by Amanda Stephenson in Calgary; Editing by Nia Williams)
