Suncor to retain its Petro-Canada retail unit following review

Suncor Energy’s Board of Directors said that following a comprehensive review, it has decided to retain and continue to improve and optimise the Petro-Canada retail business, Suncor’s integrated refining & marketing business. This will include continued optimisation of its Petro-Canada retail sites across the network as well as continued expansion of strategic partnerships in non-fuel related businesses such as quick service restaurants, convenience stores, loyalty partnerships and  energy transition offerings.  

Suncor is Canada’s leading integrated energy company, based in Calgary. Petro-Canada had a lubricants unit, based in Mississauga, Ontario, but Suncor sold the unit in late 2016 to HollyFrontier, a U.S.-based independent petroleum refiner headquartered in Dallas, Texas, U.S.A. Following HollyFrontier’s acquisition of Sinclair Oil Corporation and Sinclair Transportation Company, it formed a new parent company, HF Sinclair Corp.

Suncor announced the strategic review in July 2022, following pressure from U.S.-based activist investor Elliott Management Corp.,  which holds a 4% stake in Suncor.

Petro-Canada operates more than 1,500 gas stations across Canada, as well as a refinery in Edmonton. It also has a minority stake in the Hibernia offshore oil project in Newfoundland and Labrador.

“After careful consideration, the Board has concluded that retaining and optimising the  ompany’s retail  business will generate the highest long-term value for shareholders and therefore, has unanimously decided to retain and continue to optimize the network and expand strategic partnerships for the Petro Canada retail business that enhance our capabilities and capture increased revenue and cash flow  opportunities,” said Board Chair Mike Wilson. “Petro-Canada is a unique, differentiated, and strategic  asset due to its strong national network and best in market consumer brand and loyalty program.” 

A committee of the board, comprised of independent directors with support from independent external advisors and management, oversaw a comprehensive review and analysis of the company’s retail  business. The scope of the review consisted in part of an analysis of the existing business, including  an assessment of the value of Suncor’s integrated model, case studies from comparable peers, studies  of the future of retail in Canada and Petro-Canada’s growth plans. 

The board also reviewed preliminary indications of interest from a global set of third parties in the Petro-Canada business, through an  independent market check process, and considered feedback from a broad range of Suncor  stakeholders including investors. The committee considered the pros and cons of a range of alternatives and the likelihood of capturing long-term value for Suncor if the business was sold. 

The review highlighted the strength of the retail business, both as a leading marketer in Canada and as  a key element of Suncor’s industry leading integrated model, particularly in the downstream business.  

With 18% of Canadian retail fuel sales, Petro-Canada holds the #1 Canadian Kent Fuel Market  Share. The strength of this network is appreciated by the more than 3 million active members of  Petro-Canada’s leading fuel loyalty program, Petro-Points. An iconic Canadian brand, Petro-Canada is recognized as Canada’s leading energy brand and the Most Trusted Gas Station Brand in Canada.