May 20, 2022

The Queens County Citizen

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Imperial Oil Q3 gains as Kirl Oilsands recovers from mine failure

Imperial Oil Q3 gains as Kirl Oilsands recovers from mine failure

After an unplanned two-week hiatus, increased production from Imperial Oil Ltd’s Kirl Oilsands mine in northeast Alberta helped the company outperform expectations with small gains in third profit, along with a better-than-expected reduction in capital and operating costs. Quarterly.

The Calgary-based company had a net profit of $ 5.96 billion on Friday, up $ 3 million from $ 8.74 billion in the same quarter a year ago.

“Million 3 million may not seem like a big number, it speaks to positive numbers and volumes in this business environment,” CEO Brad Corson told a conference call with financial analysts on Friday.

Analysts have estimated a loss of $ 79 million on revenue of $ 5.7 billion, according to data firm Refinitive. Imperial lost $ 526 million on revenue of $ 3.7 billion in the second quarter.

OilSands rivals Suncore Energy Inc., Senovus Energy Inc. and Husky Energy Inc.

Like the others, Imperial focused on reducing costs.

“By the end of March, we were committed to providing a total of $ 1 billion in cost reductions, including a $ 500 million reduction in capital expenditure and $ 500 million in lower costs,” Corson said.

“By the end of the quarter, our production and production costs were down $ 813 million compared to the first nine months of 2019 … and our capital expenditure was down more than 50 percent, saving $ 700 million.”

The cost of capital has been revised downwards

Imperial revised its capital spending to $ 900 million for 2020, down $ 250 million from the median of the last guideline update, although Carson said that is likely to increase in next year’s budget.

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Production averaged 365,000 barrels of oil per day in the third quarter, compared to 407,000 bpd in the same period in 2019, but increased from 347,000 bpd in the second quarter, the company said.

Its Kirl Oilsands mine was forced to close for two weeks in September after Polaris took offline to repair a leaky pipeline. This prevented the curl from getting light petroleum, which had to be diluted with heavy bitumen so that it could flow into the pipeline.

Corson said the mine’s production reached a record 313,000 barrels per day of bitumen in the four weeks since the reopening, with an average of 300,000 bpd in October, more than 280,000 bpd capacity after the addition of auxiliary ore crushers last year.

Potential job cuts in Canada

Corson welcomed Alberta’s announcement last week that it would suspend its oil production quota in December, but said the province’s retention of the right to bring back quotas in 2021 would create “severity of uncertainty”.

Imperial shares are 70 percent owned by American energy giant ExxonMobil, which announced Thursday that 1,900 employees will lose their jobs in the United States as part of a plan to reduce the global workforce by 15 percent.

It also predicts potential job cuts in Canada, but a spokesman said Thursday that it was “premature” to talk about it, adding that ExxonMobil expects to communicate with Canadian employees in the coming weeks.

Carson called on Imperial to reduce the number of contractors it employs without saying how many or how much it has affected full-time staff by cutting costs.

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Earlier this week, Senovas and Husky They said their merger, announced last Sunday, would cut one in four jobs and lay off more than 2,000 workers if they close earlier than expected next year.

Suncore announced in early October It will cut 1,930 jobs in 18 months to reduce the total staff by 10 to 15 percent.

The Royal Dutch Shell, which announced in September that it would cut 7,000 and 9,000 jobs worldwide by the end of 2022, also said job cuts were expected in Canadian operations and would cut somewhat from BP in June. 10,000 jobs from its global workforce.