05/01/2012 10:19 EDT | Updated 07/01/2012 05:12 EDT

New chief executive takes charge at Suncor as Rick George retires

CALGARY - A new chief executive officer is now in charge of Canada's largest energy company as Rick George officially handed the reins to chief operating officer Steve Williams at Suncor Energy Inc.'s annual meeting Tuesday.

The changing of the guard took place a day after the Calgary-based energy giant reported better than expected earnings and hiked its dividend by 18 per cent.

"I can't think of a team and a leader who's equipped to face both the challenges and the tremendous opportunities that lie ahead," George told shareholders.

The outgoing CEO said Suncor is a much different company now than it was throughout much of his 21-year tenure. For instance, it has only been in the last 18 months or so that the company has had cash on its balance sheet, George told a conference call with analysts earlier in the day.

"It's a very solid company. The cash flows are amazing, and the path forward quite clear," he said.

There's no longer the need to take big risks, like Suncor did when it began using giant trucks and shovels to produce the oilsands in the early days, when it decided to build its Millennium oilsands projects when crude prices were a mere US$15 a barrel and when it took over former Crown corporation Petro-Canada.

"I think that kind of big-bet era is kind of over," George said.

Williams told reporters after the meeting that Suncor has "ambitious" growth plans, "but because we're so strong financially it's no longer a company bet."

"Today we can achieve that eight or 10 per cent (growth rate) without betting the company. So we've got the financial capacity to be able to do that within the assets we operate," he said.

The company's priorities under his leadership will be to "run the assets very well and very reliably, and then take that cash and use it first of all for growth, and then secondly to distribute to shareholders," he said.

Suncor announced late Monday it will increase its quarterly dividend by 18 per cent to 13 cents per share.

It booked first-quarter operating earnings of $1.33 billion, or 85 cents per share — beating the average estimate of 81 cents per share, according to Thomson Reuters.

During the same 2011 quarter, Suncor had operating earnings of $1.48 billion, or 94 cents per share.

First-quarter net earnings were $1.46 billion or 93 cents per share, up from $1.03 billion or 65 cents per share in the same period of 2011.

Revenues were $9.76 billion, compared with $9.08 billion a year earlier.

One of the biggest milestones of George's tenure was the 2009 takeover of former Crown corporation Petro-Canada, which transformed Suncor into Canada's largest energy company.

George said that deal has paid off. Overhead costs are lower and the refineries in Edmonton and Montreal that Suncor inherited from Petro-Canada have helped cushion the company against volatility in crude prices.

"Mergers are never easy. I would say it's the largest merger done in Canada and I do feel very proud of what we've done," he said.

Oilsands production during the quarter, excluding its share of the Syncrude oilsands mine, contributed an average of 305,700 barrels per day in the first three months of the year, compared to 322,100 barrels a year ago.

In March, Suncor took down one of its upgraders for unplanned repairs for about four weeks. The outage is not expected to affect its annual production targets.

Upgraders process heavy, impure oilsands crude into a type of oil refineries can more easily handle.

Williams said the problems at the upgrader were "certainly disappointing."

"It is important to point out that we were able to identify the issue, implement a controlled shutdown, execute the repairs and return to production in a very safe and disciplined manner," he said on the call.

"And be assured that the learnings from this incident will assist us as we move forward on our operational excellence journey."

Suncor shares were up 57 cents at $33.20 in afternoon trading Tuesday on the Toronto Stock Exchange.