* Dartmouth refinery high-performing but small
* Imperial Q1 downstream earnings fell 81 pct
CALGARY, Alberta, April 29 (Reuters) - Imperial Oil Ltd’s IMO.TO refinery in Dartmouth, Nova Scotia, faces a challenge competing against larger facilities supplying the Atlantic Seaboard market, the company’s CEO said on Thursday.
Bigger rivals are simply more cost-effective, a marked advantage during the difficult market conditions now facing refineries worldwide, Chief Executive Bruce March told reporters following Imperial’s annual meeting in Calgary.
The 89,000-barrel-a-day refinery sells gasoline, diesel, jet fuel and other products into the Canada’s Atlantic provinces and eastern Quebec.
“Dartmouth is a very, very stable, very, very high-performing operation challenged by scale, just its size,” March said. “And it happens to sit in the most competitive refining and supply basin in the world today -- that’s the whole Atlantic Eastern Seaboard of North America.”
Imperial’s four refineries account for about a quarter of Canada’s refining capacity. Rising crude prices and lower demand spurred by the recession have slashed profits for the company and its competitors.
Indeed, other companies have moved to shutter or sell some refineries to cope with the downturn. In January, Royal Dutch Shell Plc RDSa.L said it would turn its 130,000 bpd Montreal East refinery into a distribution terminal after it couldn’t find a buyer for the plant.
Imperial, Canada’s No. 2 oil explorer and refiner by market value, said on Wednesday first-quarter earnings for its downstream operations fell 81 percent from the year-prior quarter to C$39 million.
Even so, March said, the Dartmouth refinery was still generating cash for the company.
“Dartmouth does ... well but it’s limited by its scale and its size,” March said. “That’s its big challenge and it’s a hard one to overcome.”
Imperial shares rose 35 Canadian cents to C$43.24 on Thursday afternoon on the Toronto Stock Exchange. ($1=$1 Canadian) (Reporting by Scott Haggett; Editing by Frank McGurty)