Canadian producer Imperial Oil booked a higher net income for the first quarter than a year earlier as industry refining margins improved.
Imperial Oil, majority owned by U.S. supermajor ExxonMobil, reported on Friday a net income in the first quarter of US$933 million (C$1.29 billion), up from US$860 million (C$1.19 billion) for the same period of 2024. Net income rose compared to the fourth quarter, too, thanks to improved refining margins, which allowed Imperial Oil to book higher downstream margin capture.
Refining margins in North America have improved from the lows in the fourth quarter of 2024, amid resilient product demand and downtime at some North American refineries.
Imperial Oil’s upstream production averaged 418,000 gross oil-equivalent barrels per day in the first quarter, lower than the year-ago period, reflecting extreme cold weather and unplanned downtime at the Kearl project.
However, price realizations increased versus Q1 2024, thanks to the Trans Mountain pipeline expansion, which was completed and put online in the second quarter of 2024.
In May last year, the Trans Mountain pipeline finally completed its expansion – after years of delays – and tripled the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia.
For Imperial Oil, this meant that average bitumen realizations increased, primarily driven by the narrowing spread between the price of U.S. benchmark WTI Crude and the price of Western Canada Select (WCS), the benchmark for Canadian heavy crude sold at Hardisty in Alberta.
Imperial Oil’s synthetic crude oil realizations also rose, chiefly due to an improved Synthetic/ WTI spread.
“Imperial delivered strong financial results in the first quarter, highlighting the resilience of our integrated business model,” Brad Corson, chairman and chief executive officer, said in a statement.
“The Upstream business continued to benefit from improved egress and narrower heavy oil differentials, while our Downstream profitability continued to reflect the structural advantages of the Canadian market.”
By Charles Kennedy for Oilprice.com
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