April 30, 2015 / 6:54 PM / 5 years ago

Weak global crude prices hurt Imperial Oil profit

(Reuters) - Imperial Oil Ltd (IMO.TO), Canada’s No.2 integrated oil producer and refiner, on Thursday reported a 55 percent fall in quarterly profit as global crude prices halved.

President and CEO Rich Kruger of Imperial Oil addresses shareholders during the company's annual general meeting in Calgary, Alberta, April 30, 2015. REUTERS/Todd Korol

The poor results were consistent with other Canadian energy companies reporting this week that have struggled with tumbling netbacks in a quarter in which U.S. crude fell to a six-year low around $42 a barrel.

Imperial Oil Chief Executive Rich Kruger said the company, which is 69.6 percent owned by Exxon Mobil Corp (XOM.N), would maintain a cautious spending outlook in the months to come.

“We are approaching our business as if we may be in for a sustained period of lower prices,” Kruger said at the company’s annual general meeting in Calgary.

The company is close to completing expansions at its Kearl and Cold Lake oil sands projects, but Kruger said the current environment did not help accelerate new projects such as the C$7 billion Aspen thermal development.

A final investment decision on Aspen was initially expected in 2016-17, depending on regulatory approval, and Kruger said it was too early to say if that would be delayed.

Imperial has been improving market access as expansions near completion and the first train from its 210,000-barrel-per-day Edmonton crude oil rail terminal, a joint venture with Kinder Morgan Inc (KMI.N) that will serve Kearl, departed on Thursday.

Kruger also said some waterborne Kearl cargoes had been sold to refineries in Malaysia, India and China.

“Kearl has been processed at more than 20 refineries. It’s early on as refiners worldwide determine what that crude is worth,” he told reporters at a news conference after the AGM.

The company’s net income fell to C$421 million ($350 million), or C$0.50 per share, in the first quarter ended March 31, from C$946 million, or C$1.11 per share, a year earlier.

Gross production before royalties averaged 333,000 barrels of oil equivalent per day (boepd), up 3,000 barrels from the year-earlier quarter.

Kearl produced 95,000 bpd, of which 67,000 barrels were Imperial’s share, up from 70,000 bpd in the first quarter of 2014. The mine has capacity to produce 110,000 bpd, but has often struggled to meet that mark.

Imperial shares were last up 2 cents on the day at C$53.75 on the Toronto Stock Exchange.

Additional reporting by Kanika Sikka in Bengaluru; Editing by Joyjeet Das, Maju Samuel and Meredith Mazzilli

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