Suncor

Part
01
of three
Part
01

Profile: Gerry Mellershi

After an exhaustive search, no information on the personal or professional profile of Gerry Mellersh is publicly available. The team could only find that Mr. Mellersh serves as the director of firebag production operations at Suncor.

Current Position

Research Strategy

To provide a professional profile of Mr. Mellersh, your research team scoured through media publications, social media pages, and company publications. We searched through the annual report of Suncor and the about section of the company's website for a profile of top executives in the company but did not find any information about him. No social media profile was found for Mr. Mellersh other than LinkedIn which did not contain any useful information related to his education, work history, career accomplishments, or business philosophies. We also search through press releases and articles such as Denver Post, Bizjournal, Colorado Sun, Bloomberg and others for publications about him but did not find any.
Part
02
of three
Part
02

Profile: Donald Austin

Due to the limited availability of information about Donal Austin of Suncor, the team did not find any information on his accomplishments and past working experiences before he joined Suncor. However, the team was able to gather that Donald Austin studied chemical engineering at Strathclyde University in Glasgow, Scotland. He has been with Suncor since 2009 and has served in different capacities such as the director of operations integrity, operations general manager, and currently, he is the vice president of the Commerce City refinery in Colorado.

Education

  • Donald Austin studied at Strathclyde University in Glasgow, Scotland where he earned a degree in chemical engineering.

Work History & Experience

Business Philosophies

Recent Press Articles

  • In August 2019, Mr. Austin made headlines following his defense of Suncor’s track record on air-pollution issues and community engagement at the Commerce City Council.
  • In December 2019, Mr. Austin was in the news once more when he apologized, through a company letter, for the emission of catalyst from Suncor's fluidized catalytic cracking unit (FCC) which resulted in "yellow rain" on the neighborhood of Latin majority on December 11, 2019.

Additional Personal Details

Research Strategy

To provide a professional profile of Mr. Austin, your research team scoured through media publications, social media pages, and company publications. While there is limited availability of information about Mr. Austin on LinkedIn, the team was able to gather information about Mr. Austin from these sources barring information on his career accomplishments and his past work experience. Further effort to find the unavailable information include searching through the annual report of the company and the about section of the company's website for a profile of top executives in the company were unsuccessful because Mr. Austin was not listed on the company's website nor their annual report. No social media profile was found for Mr. Austin other than LinkedIn which did not contain any useful information for this research.
Part
03
of three
Part
03

Suncor: Deep Dive

The volatility of commodity prices, market access, competition, and skills shortage are four challenges and threats facing Suncor.

The Volatility of Commodity Prices

  • Suncor faces challenges resulting from the volatility of commodity prices in the oil and gas industry. The financial performance of the company is linked to the prices of crude oil, natural gas, and electricity in its upstream business, and the price of refined petroleum products in its downstream business.

Why is it a Challenge?

  • Crude oil prices are influenced by factors such as the global economic health, imbalances in supply and demand, government actions and political developments such as the "mandatory production curtailments recently imposed by the Government of Alberta", market access constraints, decisions by OPEC, and others.
  • The prices and refining margin of refined petroleum products are influenced by factors such as the availability and price of crude oil, marketplace competitiveness, market access, and others.
  • Furthermore, companies in the North American oil and gas industry, particularly in Canada, may get discounted prices for their production compared to certain international prices as a result of challenges associated with the transporting and selling of products to international markets.
  • The inability to tackle these challenges may result in "continued discounted or reduced commodity prices realized by oil and natural gas producers such as Suncor."
  • These factors are beyond Suncor's control and could have a material adverse effect on the financial performance of Suncor.

How are they Addressing this Challenge?

  • On the mandatory production curtailments by the Government of Alberta, the imposition enabled Suncor to "demonstrate the breadth and flexibility of its asset base and the strength of its business model."
  • To offset the impact of this regulation, Suncor focused on value over volume, optimized its product mix, and transferred production allotments among its assets.
  • This ensured that the company realized the "highest value possible for its produced barrels — focusing on higher-value but higher cost SCO production instead of lower margin and lower cost bitumen barrels to maximize returns."


Market Access

  • Suncor's bitumen business segment is expected to grow as a result of the limited market for bitumen blends or heavy crude oil compared to the market for light crude oil.
  • As a result, the bitumen business segment is more susceptible to imbalances and changes in supply and demand which could result from the "availability, proximity, and capacity of pipeline facilities, rail cars, or otherwise."

Why is it a Challenge?

  • Factors such as "insufficient pipeline takeaway capacity, including the lack of new pipelines due to an inability to secure required approvals and negative public perception" constitute challenges to Suncor's oil sand production business.
  • Suncor's refined product businesses are also challenged by "insufficient takeaway capacity, which could create a supply/demand imbalance."
  • These factors are constraints to Suncor's market access which could have a material adverse effect on the financial performance of the company.


Competition

Why is it a Challenge?

  • Suncor competes with other energy companies in virtually every aspect of its business such as exploration, refining, distribution, and others, as well as other companies that offer alternative sources of energy.
  • The competition is further complicated by the "increasing volatility of the political and social landscape at provincial, federal, territorial, state, municipal, and international levels."
  • Due to these competitions, the industry is threatened by cost increment which would put further strain on the "existing infrastructure and cause margins for refined and unrefined products to be volatile."
  • This would impact the demand for Suncor's products and affect the financial performance of the company.


Skills Shortage

  • The success of Suncor's businesses is dependent on the availability of skilled labor and material supply.
  • However, the company hinted in its annual report that they face difficulties in the sourcing and recruitment of skilled personnel needed for the current and future operation of the company.

Why is it a Challenge?

  • The threat posed by skills shortage emanates from the company's "inability to recruit new staff without a dilution of talent, to train, develop and retain high-quality and experienced staff without unacceptably high attrition, and to satisfy an employee’s work/life balance and desire for competitive compensation."
  • This is further compounded by the increasing age of the company's current skilled workforce and changing skill sets required to adapt to technological transformations in the industry.
  • A shortage of skilled workforce would impact the company's ability to operate effectively and the completion of projects on time and budget.
Sources
Sources

From Part 03