Imperial Oil profit jumps 45 percent as income from refining surges

Fri Oct 31, 2014 11:14am EDT
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(Reuters) - Imperial Oil Ltd (IMO.TO: Quote), Canada's second-largest integrated oil producer and refiner, reported a 45 percent jump in third-quarter profit on Friday as it refined more crude oil at higher margins.

Weak crude prices helped boost margins at the company's refining business, which accounts for three-quarters of its total revenue.

Global oil prices have fallen by about 25 percent since June due to excess supply, including supply from North American shale fields, and slowing demand, particularly from China and Europe.

Imperial, which is 69.6 percent owned by Exxon Mobil Corp (XOM.N: Quote), said it sold synthetic crude at an average of C$102.58($90.78) per barrel, down 10 percent from a year earlier.

Average realized price for bitumen fell about 8 percent to C$74.82 per barrel.

The impact of lower prices was offset by a near eight-fold jump in net income in Imperial's downstream business, which transports and refines crude oil into products such as gasoline and diesel. Revenue in the business rose 5 percent.

However, weak crude prices hurt Imperial's upstream oil-and-gas production business significantly, slowing revenue growth in the unit to about 8 percent from 54 percent.

Production at Imperial's Kearl oil sands mining project in northern Alberta averaged 78,000 barrels per day for the quarter, which included a 14-day maintenance shutdown.

Excluding the shutdown, Imperial said Kearl output was 92,000 bpd. Capacity at Kearl, Canada's newest oil sands mine, is 110,000 bpd, but the mine has been dogged by production problems since starting up last year.   Continued...