Saskatoon StarPhoenix

Imperial Oil CEO defends absence from oilsands consolidat­ion trend

- DAN HEALING

CALGARY CEO Rich Kruger said Friday his company has not been idle while other major Canadian producers snapped up oilsands assets from foreign rivals over the past year.

The head of Imperial Oil said the Calgary-based company, one of the top four oilsands producers in Canada, has been busy building and commission­ing its Kearl oilsands mining project where the first phase started in 2013 and the second phase in 2015. It has also been dealing with operationa­l issues at its Nabiye steam-driven oilsands project, which started production in 2015.

“We’ve just completed an unpreceden­ted period of upstream growth with two phases of Kearl, with Nabiye,” he told reporters after the company’s annual meeting of shareholde­rs. “We have commented several times on how we’re progressin­g the technical and commercial project opportunit­ies for readiness. So I wouldn’t describe it as ‘on the sidelines.”’

Last month, Royal Dutch Shell announced it had agreed to sell most of its Canadian oilsands assets to Canadian Natural Resources for about $11.1 billion, while Cenovus Energy unveiled a $17.7-billion deal to buy most of the Canadian assets of Houston-based ConocoPhil­lips, including its half interest in jointly owned oilsands assets.

Calgary-based Suncor Energy last year increased its ownership of Syncrude Canada from 12 per cent to over 53 per cent by buying Canadian Oil Sands for $6.6 billion in cash and assumed debt, and adding Murphy Oil’s interest for $937 million.

At its annual meeting on Thursday, Suncor CEO Steve Williams said he expects more foreign firms will sell oilsands stakes, citing Chevron, BP and Total as names that are said to be interested in selling.

Oilsands analyst Michael Dunn of GMP FirstEnerg­y said he agrees that the consolidat­ion isn’t over yet, adding there were strategic reasons for the other Canadian oilsands buyers to make the deals they made. He pointed out that Imperial, which is 69.6 per cent owned by American oil giant Exxon Mobil, has previously indicated it would prefer to buy large-scale, high-quality, non-mining oilsands resources, implying a preference for undevelope­d projects.

Kruger said Imperial keeps its mergers and acquisitio­n plans “close to chest” but is watching for opportunit­ies to add value from internal projects or through acquisitio­n.

Imperial on Friday reported first-quarter net income of $333 million, or 39 cents per share, in the three months ended March 31.

Operating earnings per share were 21 cents, versus consensus analyst expectatio­ns of 40 cents.

The company says it will increase its quarterly dividend in June by a penny to 16 cents per share.

Total revenue was up 37 per cent to $7.16 billion.

Production averaged 378,000 barrels of oil equivalent per day, compared to 421,000 boe/d in the same period of 2016, due in part to a fire at the Syncrude Mildred Lake upgrader in mid-March which affected production.

Imperial owns 25 per cent of Syncrude.

 ?? JEFF MCINTOSH/THE CANADIAN PRESS ?? Imperial Oil chief executive Rich Kruger says the oilsands producer has been busy finishing “an unpreceden­ted period of upstream growth” with its Kearl and Nabiye oilsands projects.
JEFF MCINTOSH/THE CANADIAN PRESS Imperial Oil chief executive Rich Kruger says the oilsands producer has been busy finishing “an unpreceden­ted period of upstream growth” with its Kearl and Nabiye oilsands projects.

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