CALGARY – Encana’s new CEO — formerly BP’s point man on the Gulf of Mexico oil spill cleanup — says he’s in no rush to chart a new course for the troubled natural gas giant.
The appointment of Doug Suttles, a 30-year veteran of the industry who most recently was chief operating officer at BP Exploration and Production, was announced Tuesday by the Calgary-based company (TSX:ECA).
On his first day on the job, Suttles said he intends to gain a solid understanding of Encana’s assets and people before laying out his vision for the company, which has been beset by a weak natural gas market for several years.
“I want to do this once and I want to do it right,” said Suttles, who turns 53 this month.
“So I hope you can appreciate that it will take some time before I will be in a position to articulate a clear and concise vision for Encana.”
Although North American natural gas prices have been firming up recently, Suttles has a conservative outlook for the sector.
“My personal outlook is we’re going to be in a modest price environment for some time,” he said.
“Clearly I hope it improves, but I think the way you should run the business is assuming modest prices.”
Since spinning off its oil and refinery business into Cenovus Energy Inc. (TSX:CVE) in 2009, Encana has been focused on natural gas. Advances in drilling techniques — many of which Encana pioneered — have unlocked vast amounts of gas from shales across the continent, leading to a supply glut that has depressed prices.
In recent years, Encana has had to back off of aggressive growth plans, instead focusing on driving down costs, shedding non-core assets and inking joint-venture deals with deep-pocketed international partners, such as PetroChina and Mitsubishi.
Suttles said he sees Encana as a “North American energy company,” but not necessarily one centred on one commodity.
“You have to play to your strengths…You have to know what you’re good at and stay within that,” he said.
“I think our shareholders want us to deliver sustainable value growth for them and that’s what we need to do and we’ll look at what that means to portfolio mix and other things as we look at strategy.”
Among other things, Suttles helped lead the cleanup of BP’s Gulf of Mexico spill in the summer of 2010. He left BP in early 2011 after 22 years at the company, and has served on corporate boards and done some consulting work in the intervening years.
“You can’t go through deeply challenging events without learning a lot,” said Suttles.
“Leadership matters a lot and being able to lead people and help them go in the right direction is so important.”
Clayton Woitas, who had been filling in as Encana’s CEO on an interim basis since Randy Eresman’s abrupt departure from the top job in January, said the board of directors looked at more than 100 candidates.
“Recognizing the challenges and opportunities in front of the company, we knew that we needed someone with a strong track record of success, someone who is a front line leader, someone with exceptional communication skills and someone who can develop a clear, consistent strategy for the company,” he said.
“When I first met Doug, I immediately noticed that he was articulate, confident and charismatic. This is exactly what Encana needs in a leader.”
Woitas said Encana considered Suttles’ experience handling the BP spill aftermath an asset.
“Speaking personally, I know that some of my best learnings from my career came from difficult situations,” said Woitas.
Suttles will also join the board as a director, while Woitas has been designated as the board’s future chairman, replacing David O’Brien, who is retiring.
Woitas said in April, after Encana’s annual meeting, that there were three internal candidates for the top executive job, including chief financial officer Sherri Brillon.
First Asset Investment Management portfolio manager John Stephenson said he’s pleased Encana brought in its new CEO from outside the company.
He said there’s been too much bad news in the Calgary oilpatch recently and it “needs to be shaken up a little bit.”
“I think the only way to get that change is through an outsider.”
Suttles — whose family is deeply rooted in West Texas and the energy business — trained as a mechanical engineer at the University of Texas in Austin where he graduated in 1983.
From 1983 to 1988 he had assignments at Exxon before joining BP.
His positions at the British oil giant included vice-president for North Sea operations, and he has also been president of BP Sakhalin Inc. in Russia and president of BP Alaska.
“Coming to Calgary is not my first chance to get cold,” he said.
Encana shares closed down 37 cents at $18.54 on the Toronto Stock Exchange.