Murray Edwards, left, Executive Chairman, and Steve Laut, centre, president of Canadian Natural Resources, prepare to address the company's annual meeting in Calgary, Thursday, May 4, 2017. CNRL said Tuesday that Laut will become executive vice chairman as the company moves a number of executives in a bid to position itself for future growth.Jeff McIntosh/The Globe and Mail
New leaders have been promoted at Canadian Natural Resources Ltd., as the country's largest producer of oil and gas re-organizes its top ranks and long-time president Steve Laut takes a step back.
Murray Edwards, the billionaire who started the company in 1988 in his late 20s, remains executive chairman. CNRL, unusual for a large company, does not have a chief executive. Mr. Edwards is its top executive.
Mr. Laut has been president since 2005 and will become executive vice-chairman effective Feb. 28. The new president will be Tim McKay, an engineer who has been at CNRL since the early days, joining in 1990. Mr. McKay is currently chief operating officer.
The changes come as CNRL has completed major work, led by expansion of its Horizon oil sands operation and the acquisition of Royal Dutch Shell PLC's oil sands business. CNRL's output for the first time topped one million barrels a day in the July-September quarter, up about 40 per cent largely because of Horizon and Shell.
The chief operating officer job is being split in two, to reflect the company's larger size. Darren Fichter, a two-decade CNRL veteran and currently an executive vice-president, will be chief operating officer of exploration and production. Scott Stauth, another two-decade veteran of the company and also an executive vice-president, will be chief operating officer of the oil sands.
"Canadian Natural has a strong track record of successful succession at the senior leadership level, ensuring Canadian Natural continues to deliver top-tier performance," Mr. Edwards said in a statement.
Mr. Laut turned 60 this year and makes his move following the Horizon and Shell work. In an interview, Mr. Laut said he is looking forward to a less demanding role but will remain closely involved in the company. He wants to spend more time with family and on personal pursuits.
"For me, it's the right time," Mr. Laut said. As for Mr. McKay, his successor, Mr. Laut said: "Tim's ready. Tim's an outstanding leader."
In addition to the absence of a CEO, another way CNRL is different from other large corporations as it is overseen by a 15-person management committee, headed by Mr. Edwards. The group holds marathon meetings every Monday, starting at 7:30 a.m. and running into the evening, to pore over all aspects of the business. Mr. Laut will stay on the committee.
The management-committee roundtable is the way CNRL has been run since the beginning, Mr. Laut said. "It improves communication," he said. "You get all the facts on the table. Decision making is much more effective and timely."
The committee, as it brings in new faces over time, benefits from extensive experience working together, he added. "We've been together a long time."
In November, the company forecast a 17-per-cent rise in 2018 production, expected to range between 1.1 million and 1.2 million barrels of oil equivalent a day (boe/d). The company plans to spend $4.3-billion in 2018, lower than $4.8-billion in 2017.
Mr. Edwards, who recently turned 58, has always been at the helm. A decade after he founded the company, he was still listed simply as a director on the board. In the early 2000s, he became vice-chairman, and in 2012 became chairman, after long-time chair Allan Markin resigned. In 2015, Mr. Edwards's title became executive chairman, for the first time reflecting his role as the driving force of CNRL.
While Mr. Edwards leads, the leadership by committee is an equal driving force, observers say.
Not having a CEO is one of CNRL's "distinguishing characteristics," according to an analysis by RBC Dominion Securities last year that described the firm as "monotonously good."
RBC analyst Greg Pardy on Tuesday said Mr. McKay was a "great choice" for president and was much like his predecessor Mr. Laut. "Tim lets results speak," Mr. Pardy said. "They all have pride and they like to deliver. They don't go around beating a big drum about themselves."
As for Mr. Edwards, Mr. Pardy said: "Murray's not going anywhere."
After several difficult years for the energy business, CNRL has thrived in 2017. It has posted a profit of $2-billion, or $1.71 a share, on revenue of $11.64-billion in the year's first nine months. In the same period in 2016, the company had a loss of $770-million, or 70 cents, on $7.07-billion in revenue.
The management changes were announced before markets opened Tuesday. CNRL stock was steady and closed at $44.29, down 22 cents, or 0.49 per cent. Over the past year, the shares are roughly flat, but in the past five years, they have climbed about 60 per cent.