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Imperial Oil Earnings Plummet By 72% On Turnaround, Lower Prices

Canada’s Imperial Oil reported on Friday a 72% annual plunge in net income for the second quarter amid lower commodity prices and significant turnaround activities in both the upstream and downstream divisions.

Imperial Oil, majority-owned by U.S. supermajor ExxonMobil, posted a net income of US$510 million (C$675 million) for the second quarter, down from US$1.8 billion (C$2.4 billion) for the same period of 2022. The net income in the April-June 2023 quarter was also halved from the income for the first quarter of 2023, hit by lower refining margins and planned maintenance.   

Lower crude oil prices also impacted Imperial’s earnings. The company’s average price realizations for Western Canada Select, the benchmark for Canadian crude, slumped to US$58.49 per barrel in the second quarter of 2023, down from US$95.80 a barrel for the same quarter in 2022. 

Imperial Oil’s upstream production averaged 363,000 gross oil-equivalent barrels per day in the second quarter, down by 12% from 413,000 gross oil-equivalent barrels per day in the same period of 2022. Planned maintenance at the Kearl, Cold Lake, and Syncrude production sites impacted oil and gas output.   

In the Downstream, throughput in the quarter averaged 388,000 barrels per day (bpd) with refinery capacity utilization of 90%, reflecting the impact of the planned turnaround at the Strathcona refinery near Edmonton.

“Imperial’s results in the second quarter reflect the safe and on-plan execution of significant turnaround activity across our Upstream and Downstream business lines,” said Brad Corson, Imperial's chairman, president and chief executive officer. “With substantial turnaround activity now behind us, we anticipate strong production in the second half of 2023.”

Imperial Oil’s majority owner, ExxonMobil, missed analyst forecasts as it reported on Friday 56% lower earnings for the second quarter amid lower natural gas prices and weaker refining margins. 

Exxon reported on Friday second-quarter 2023 earnings of $7.9 billion, or $1.94 per share assuming dilution, down from a record $17.85 billion profit for the second quarter of 2022. Exxon’s earnings per share for the second quarter this year missed the analyst consensus estimate of $2.03 EPS compiled by The Wall Street Journal.  

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By Charles Kennedy for Oilprice.com

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