Activist company

Suncor Energy’s quarterly earnings rise as company plans to divest assets

Petrochemical storage tanks are seen at the Suncor Energy chemical plant near Edmonton, Alberta, Canada. Suncor released its second quarter results on Thursday.TODD ​​KOROL/Reuters

Suncor Energy Inc. SU-T more than quadrupled its second-quarter profit on Thursday as the oil producer benefited from higher commodity prices and launched plans to divest assets and reduction in its portfolio.

Sanctions on the major Russian energy producer have deepened supply problems, pushing global crude prices up nearly 48% in the first half of the year as energy companies have yet to ramp up production to meet the growing demand for fuel.

Suncor, Canada’s third-largest oil producer, said it had signed an agreement to divest its Norwegian assets for around $410 million, and also began a sale process for all of its UK operations after have received interest.

He did not disclose details of the Norwegian or British asset buyers.

The Calgary, Alberta-based company had reached a deal with activist investor Elliott Investment Management last month. As part of the deal, it appointed three new independent directors and announced it would review its retail gas station business.

Elliott had criticized Suncor’s operational and safety record. Last month, Mark Little resigned as chief executive, a day after a Suncor worker died, the thirteenth fatality on site since 2014.

Suncor on Thursday raised its full-year capital spending forecast to $4.9 billion – $5.2 billion from $4.7 billion previously, citing inflationary pressures and rising spending on improving security.

It lowered its production forecast for 2022 to 740,000-760,000 barrels per day from 750,000 to 790,000.

The company expects to complete the sale of its Norwegian assets in the fourth quarter. The assets include the offshore Oda, Fenja and Beta fields, in which Suncor has varying interests of 17.5% to 30%, according to its website.

Total upstream production in the reported quarter was 720,200 barrels of oil equivalent per day (boepd), compared to 699,700 boepd a year earlier.

Crude throughput at the company’s refinery increased nearly 20% to 389,300 barrels per day.

Net profit more than quadrupled to C$3.996 billion ($3.11 billion), or C$2.84 per share.

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