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Imperial Oil Books Lower Q3 Earnings as Crude Prices Drop
Canadian producer Imperial Oil reported on Friday a decline in third-quarter earnings amid lower crude prices and refinery activity, which more than offset the highest Q3 production in more than 30 years.
Imperial Oil’s net income came in at US$888.6 million (C$1.237 billion) for the third quarter, down from US$1.15 billion (C$1.601 billion) for the same period last year.
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Imperial Oil, majority owned by U.S. supermajor ExxonMobil, said that its upstream production averaged 447,000 gross oil-equivalent barrels per day, the highest third quarter in over 30 years, and up from 423,000 gross oil-equivalent barrels per day in the same period of 2023. The rise in output was primarily driven by the ramp-up of the Grand Rapids project of the Cold Lake production area.
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However, oil prices fell during the third quarter compared to a year earlier, while refining margins plunged and refinery utilization at Imperial Oil facilities declined due to turnarounds.
“During the third quarter, crude prices decreased versus the second quarter, reflecting uncertainty about future China demand and OPEC+ supply. The Canadian WTI/WCS spread remained stable in the third quarter and narrowed versus the 2023 full-year average,” Imperial Oil said, commenting on the recent business environment.
Refining margins fell from a year ago and from the second quarter as “increased supply outpaced global demand,” the company said.
Average bitumen and synthetic crude oil realizations decreased in Q3, primarily driven by lower marker prices and a decline in the WTI crude benchmark, Imperial Oil noted.
Refinery throughput averaged 389,000 barrels per day (bpd), compared to 416,000 bpd in the third quarter of 2023, reflecting planned turnaround activities at the Nanticoke and Strathcona refineries. Capacity utilization fell to 90%, from 96% in the third quarter of 2023.
During the quarter, Imperial returned a total of US$1.1 billion (C$1.528 billion) to shareholders through dividend payments and accelerated share repurchases under the normal course issuer bid (NCIB) program.
By Charles Kennedy for Oilprice.com
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