Imperial Oil profits sink despite boost in production

Imperial Oil Ltd., a Canadian affiliate of Exxon Mobil Corp., said profit in the third quarter sank even after it boosted production as oil stuck near six-year lows.

Net income fell to $479 million, or 56 cents a share, from $936 million, or $1.10, a year earlier, the Calgarybased company said Friday in a statement.

Imperial, which produces crude from the oilsands and conventional wells in Western Canada, relied on gains at its refining business to offset declines in profitability from oil and gas production. The company is expanding its Kearl bitumen mine and boosting output at its leases in the Cold Lake area of northern Alberta.

Net income at Imperial’s refineries rose to $454 million in the quarter from $343 million, while its oil and gas production operations lost $52 million compared with a net income of $532 million a year earlier.

Profit at the chemical business increased 12 per cent to a record $78 million in the third quarter.

Daily production in the quarter averaged the equivalent of 386,000 barrels of oil, an increase of 26 per cent from the year-earlier period.

At Kearl in July and August output reached as much as 200,000 barrels a day, or 91 per cent of capacity, before being reduced in September for maintenance, said Greg Pardy, an analyst at RBC Capital Markets.

“This year is about delivering unprecedented upstream growth that will add value for decades to come,” chief executive officer Rich Kruger said in the statement. The decline in earnings were the result of lower global crude prices, the company said.