• 7 hours U.S. Oil Production To Increase in November As Rig Count Falls
  • 9 hours Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 11 hours Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 13 hours EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 15 hours Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 15 hours Aramco Says No Plans To Shelve IPO
  • 3 days Trump Passes Iran Nuclear Deal Back to Congress
  • 3 days Texas Shutters More Coal-Fired Plants
  • 3 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 4 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 4 days Chevron Quits Australian Deepwater Oil Exploration
  • 4 days Europe Braces For End Of Iran Nuclear Deal
  • 4 days Renewable Energy Startup Powering Native American Protest Camp
  • 4 days Husky Energy Set To Restart Pipeline
  • 4 days Russia, Morocco Sign String Of Energy And Military Deals
  • 4 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 4 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 5 days India Needs Help To Boost Oil Production
  • 5 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 5 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 5 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 5 days District Judge Rules Dakota Access Can Continue Operating
  • 5 days Surprise Oil Inventory Build Shocks Markets
  • 5 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 5 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 6 days Chinese Teapots Create $5B JV To Compete With State Firms
  • 6 days Oil M&A Deals Set To Rise
  • 6 days South Sudan Tightens Oil Industry Security
  • 6 days Over 1 Million Bpd Remain Offline In Gulf Of Mexico
  • 6 days Turkmenistan To Spend $93-Billion On Oil And Gas Sector
  • 6 days Indian Hydrocarbon Projects Get $300 Billion Boost Over 10 Years
  • 6 days Record U.S. Crude Exports Squeeze North Sea Oil
  • 6 days Iraq Aims To Reopen Kirkuk-Turkey Oil Pipeline Bypassing Kurdistan
  • 6 days Supply Crunch To Lead To Oil Price Spike By 2020s, Expert Says
  • 7 days Saudi Arabia Ups November Oil Exports To 7-Million Bpd
  • 7 days Niger Delta State Looks To Break Free From Oil
  • 7 days Brazilian Conglomerate To Expand Into Renewables
  • 7 days Kurdish Independence Could Spark Civil War
  • 7 days Chevron, Total Waiting In The Wings As Shell Mulls Majnoon Exit
  • 7 days The Capital Of Coal Is Looking For Other Options
The New Challenger To Lithium Batteries

The New Challenger To Lithium Batteries

The lithium-ion battery is head…

Canada Aims To Solve U.S. Nuclear Woes

Canada Aims To Solve U.S. Nuclear Woes

Canada is bidding to replace…

Canada’s Imperial Oil Defiant Despite Earnings Drop

Like many other oil companies, Imperial Oil Ltd. of Canada had a sharp drop in earnings during 2014’s fourth quarter and is cutting capital spending as a result, but it’s moving ahead anyway with a key oil sands project in northern Alberta.

Imperial, Canada’s second-largest oil producer and refiner, suffered a 36.5 percent drop in quarterly earnings not only because of the persistently low price of oil but also lower margins in refining and marketing. As a result it said Feb. 2 it expects to reduce spending by 29 percent this year, down to about $3.2 billion US, and will closely monitor spending throughout the year.

The net income for Imperial fell to $671 million in the quarter, or 63 cents per share. Net income for the same quarter in 2013 was $840 million or 98 cents per share. Overall revenue fell 4 percent to $6.37 billion.

Related: Why The World Needs Both Shale And Tar Sands

Overall production at Imperial, based in Calgary, declined by 4 percent to an average of 315,000 barrels of oil equivalent per day, and selling prices for synthetic crude oil fell to an average of just over $65 per barrel, a drop of 10.5 percent. It’s average price for bitumen – semi-solid crude oil known popularly as oil sands – dropped to $41.55 per barrel, a decline of about 1.8 percent.

The loss also directly affected Exxon Mobil Corp., which owns 69.6 percent of Imperial. Exxon suffered a 21 percent drop in quarterly earnings.

Nevertheless, Imperial’s standing in the industry was buoyed because its earnings were 60 cents higher than the average of analysts’ forecast.

In fact, Imperial intends to double production from its $16 billion Kearl oil-sands project in northeastern Alberta and is increasing output from the $1.59 billion Nabiye oil sands project in the province’s east-central sector near the border of Saskatchewan. Perhaps to help raise money for these projects, the company said Jan. 28 that it may sell 475 of its Esso-branded gas stations in Canada.

The nearly 60 percent drop in oil price since June has made oil sands output increasingly less profitable. Yet energy companies remain enthusiastic about Canada’s oil sands because they contain the third-largest oil reserves in the world and account for about half the country’s oil production.

Related: Alberta One Of Hardest Hit By Lower Oil Prices

Imperial says Kearl alone contains about 4.6 billion barrels of recoverable bitumen and was responsible for the production of 66,000 barrels a day in the fourth quarter of 2014. The company says its enlargement is proceeding well, with expanded production in the third-quarter of this year, rather than the original forecast of a year-end startup.

Once the expansion is complete, Imperial expects Kearl’s production to reach 220,000 barrels per day.
Production at Nabiye, meanwhile, is expected to begin in the first quarter of this year, eventually reaching levels of 40,000 barrels per day.

As a result, despite the fourth-quarter drop in earnings, Rich Kruger, the chairman, president and CEO of Imperial, expressed optimism about the company’s performance: “Imperial’s competitively advantaged assets, integrated business model and focus on the fundamentals contributed to our ability to deliver strong financial and operating results and industry-leading shareholder return in 2014.”

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News