Imperial Oil breaks production records

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Brad Corson, CEO of the company, said that it aims to continue breaking records in a conference call with investors.

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As Canada’s energy sector ramps up for the anticipated start-up of the Trans Mountain pipeline expansion, Imperial Oil Ltd. reported its highest production levels in over 30 years in the fourth quarter of 2023.

The Calgary-based company — which is majority-owned by U.S. giant Exxon Mobil — said its output for the three months ended Dec. 31 averaged 452,000 gross oil-equivalent barrels per day, up from 441,000 in the same period a year earlier. It marks the firm’s highest quarterly production in three decades, when adjusted for the sale of its stake in XTO Energy Canada in 2022, the company said Friday.

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Imperial also broke production records at the Kearl oilsands Mine, where total quarterly production reached a record 308,000 barrels a day. The full-year production also hit a record 270,000 barrels / day.

Brad Corson, Imperial President and CEO Brad Corson stated that the company intends to continue breaking new records.

“We just delivered our highest annual volumes at Kearl with (270,000). Now we’ve got to get to 280. And then we’ll get to 300. It’s kind of one step at a time,” Corson said. “We are progressing steps to get us to 300,000 barrels a day.”

Imperial has worked for some time at Kearl to improve productivity, lower costs, and is located north of Fort McMurray.

A major piece of that work was Imperial’s multi-year effort to convert its entire fleet of heavy haul mining trucks at Kearl to fully autonomous operation. The company announced last fall that the project was complete.

Corson said that autonomous trucks are more efficient and safer than a fleet operated by humans.

“There is no doubt that having that autonomous haul fleet has contributed materially to our ability to achieve these record volumes as well as a significant improvement in operating costs,” he said.

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“And we’re still, I think, realizing the full potential of that because it’s only been in the last quarter or so that we’ve completed that full conversion.”

Imperial’s record production in the fourth quarter spurred the company to raise its quarterly dividend by 20 per cent even as lower oil prices meant Imperial’s fourth-quarter profit declined to $1.37 billion, down from $1.73 billion a year earlier.

The company announced on Friday that it will be paying a 60-cent quarterly dividend per share. This is an increase of 50-cents per share.

Imperial reported revenue for the fourth quarter of $13.11 Billion, down from $14.45 Billion in the final three months of 2022.

The company, like many Canadian oil companies, is feeling good about the expected completion this spring of the Trans Mountain pipeline expansion, which will give Canada’s oil industry an additional 590,000 barrels per day of export capacity.

Corson said, while the volumes Imperial contracted to ship via Trans Mountain were relatively small in comparison to some other oil firms, the entire Canadian Industry will benefit. The additional market access will reduce the discount that Canadian producers usually take on their oil due to a shortage of export capacity.

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“So the biggest benefit (of Trans Mountain) for us is not the individual barrels we ship, but our view of the impact it will have on our true value,” Corson said.

Earlier this week, the company building the Trans Mountain pipeline expansion announced it had run into fresh construction-related hurdles that could push the pipeline’s expected start-up from what had been a first-quarter target date to sometime in the second quarter.

The increase in production of Canadian oil producers has already begun in anticipation of this project. According to data from Alberta Energy Regulator, the oil production in Alberta reached a record high in November 2023. The province’s crude oil production rose by 8.8 percent that month, reaching a new historical high of 4.2 millions barrels per day.

Alberta averaged 3.8 millions barrels of oil per day in the eleven months leading up to 2023. That’s an increase of 1.6 per cent over 2022 and a five-percent increase over the same period in 2020.

This report was published by The Canadian Press on February 2, 2024.

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