Case ID 13-1088
Published 2013
Industry CRUDE PETROLEUM AND NATURAL GAS PRODUCTION
Industry Code 053
Subject General management


Abstract This case addresses the strategic direction of Canada’s largest oil company, Suncor Energy. The company had undergone a merger with Petro-Canada, a former Crown Corporation, in 2009. After the merger, Suncor Energy formed an integrated model and operate in three major categories, Oil Sand, Exploration and Production (Conventional) and Downstream (Refining and Marketing). Suncor was able to utilize the integrated model to form natural hedges against the cynical oil commodity price. Financial performance and cash flow of the company have been strong, yet the stock price has been lagging behind other players in the industry. The new Suncor has an oil centric mindset and uses the downstream to fund the highly costly capital project in the oil sand area. The oil sand industry, however, is facing tremendous challenges from many aspect including environmental criticism, depressed oil pricing due to lack of pipeline infrastructure, rapid cost increase and labour shortage. The case requires reader/students to explore a feasible long term strategic direction for Suncor Energy.
Pages 25
Teaching Note Yes