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ConocoPhillips

Executive Message

Ken Lueers
Ken Lueers, President Canada

If there's one word that's defined our company in 2011 and 2012, it's "change." The repositioning of ConocoPhillips into two leading energy companies on May 1, 2012, was one of the largest changes in the company's history, but it was far from the only significant one this year. We've also started looking into an exciting new potential development in the Arctic, we've seen leadership changes throughout the organization, and the public has an increasing interest in responsible business practices across all sectors – making the accuracy and transparency of our sustainable development reporting more important today than it has ever been before.

I think we're adapting to these changes well, though I don't think there's anything new about that. Developing our assets responsibly is part of what allows us to grow strategically and to deliver superior returns. For us, "sustainable development" is just another way of saying "smart business." And we'll have to be smart if we're going to achieve our ambitious long-range business plan.

Each of our three main development areas – the Western Canada business unit, Arctic business unit and Oil Sands business unit– have related goals. In our Western Canada business unit we're already the lowest cost and most efficient operator in Canada, but it's going to take work to keep that up. In the oil sands, we're striving to unlock the potential of our world-class assets by unlocking the potential of our world-class people – and bringing many more on board. And in the Arctic, we're a first mover in the Canadian north. The early work to determine if we will move forward on our Amauligak project is just the most recent example of our goal to plan for tomorrow's legacy assets today.

And if we're going to achieve these goals, we have to keep rolling with changes like these.

In our Western Canada business unit we're working to adjust to the effects of low natural gas prices. This challenge has made us think long and hard about innovating our processes and technologies, moving into new development areas, and re-energizing our business in the areas where we currently work.

One way we're doing that is through a focus on oil and liquids-rich assets in Western Canada. Another way is our adoption of more horizontal wells to improve production while reducing our environmental impacts. In 2011, ConocoPhillips drilled approximately 114 wells, of which 85 were horizontal wells.

In the Arctic, we've started talking with some important stakeholders about our Amauligak asset. We're still in the first stage of our planning process, and already engaging with government and local stakeholders about how those resources can be developed in a way that respects the history and culture of the indigenous people.

While it's useful to break down our business into specific areas in order to talk about specific goals, at the end of the day we're one company operating in one Canada. And as a whole, our business is growing. And it's growing smart.

Operating a smart business is what allows us to adapt to changes like these and others. In fact, one of the smartest decisions we've made recently was that we weren't going to do it all alone.

This year saw the launch of the Canadian Oil Sands Innovation Alliance (COSIA), a group of oil sands production companies focused on reducing the environmental impacts of the industry. Energy production is a competitive business, but finding efficient, cost-effective ways of reducing the environmental impacts of energy production is everyone's business. COSIA helps us tap the vast brainpower available throughout the whole industry to meet those challenges head-on.

Collaboration is central to the way we approach addressing the environmental impacts of oil sands development, and it's also important for our work with communities. That's why we've contributed to the development of resources like the 881 Business Incubator and Local Opportunities Centre in Fort McMurray. These provide resources to start-ups in the area in order to help them get off the ground, and job training and placement opportunities to local residents. We've also facilitated collaboration between former Prime Minister Paul Martin's Aboriginal Education Initiative and oil sands companies to introduce a new curriculum and mentorship opportunities for local aboriginal high school students focused on entrepreneurship. We do these things because, in the long term, these people could be our future leaders. And in the short term, having well-trained, engaged contractors and employees is what allows us to operate our business as profitably, safely and responsibly as possible.

And our strong commitment to safety and the environment is one thing that hasn't changed.

In 2011, we increased the amount of money we're spending on oil sands technology development from $41 million to $70 million. This money is helping us develop technologies that reduce our environmental impacts, such as our e-SAGD pilot, which could help us to reduce our greenhouse gas emissions by a significant amount. You can read about some of our oil sands technologies here. A future update to the portal will have even more information about e-SAGD and other exciting technological developments.

Our safety record has shown a steady trend of improvement for years, and for 2012, our goal is to further improve our total recordable incident rate by 30 percent. Between 2007 and 2011, we had a 94 percent reduction in vehicle incidents. Other plans include incorporating driver "work-alone" tools and setting up area-specific parameters for managing road risk, including school zones and high-risk logging roads.

Over the past few years, we've also really been working to enhance our focus on process safety – and we've been seeing results. In 2011, we had nine process safety-related incidents. While most of these were relatively low risk, we treat every loss of containment seriously. So in response, we've reviewed and enhanced our maintenance and reliability, operating integrity and auditing programs. We'll be reporting the results of those improvements on the portal.

Safety is one of our strongest company values, but all the others play a big role in our sustainability story as well. Integrity is the foundation of responsible development – having the integrity to behave as an ethical, responsible corporate citizen and transparently report our activities has a huge impact on our social license to operate. You can read more about our ethics policy here.

To make any of this possible we need the right people, we need the most innovative processes and technologies, and most importantly, we need to work as a team. That's the good news.

The great news is that our continued commitment to improving our environmental, economic and social performance isn't really news at all. Since our Sustainable Development portal launched in 2010, we've been transparently communicating our progress towards our goals – as well as the areas where we need improvement. You'll find both in the updates we'll be rolling out regularly in the months and years to come because we firmly believe that responsible development of the world's energy resources is something that concerns us all.

This website is the start of the conversation, not the end of it. Whether we're collaborating with our industry peers and academic counterparts to reduce environmental impacts in the oil sands, or working with community stakeholders in the Arctic and Western Canada, we're confronting the changes and challenges of our industry together.

And there's no smarter business than that.

Ken Lueers, President Canada

Posted October 26, 2012 

Last updated on February 5, 2015