CALGARY – Imperial Oil Ltd. (TSX:IMO) posted a 45 per cent increase in third-quarter profits thanks to strong performance in its refining and chemical business.
The major oil producer and refiner, majority owned by ExxonMobil Corp., said net income for the third quarter was $936 million, or $1.10 per share, beating the average analyst estimate of 98 cents, according to Thomson Reuters.
During the same quarter a year earlier, profits were $647 million, or 76 cents per share.
The downstream part of Imperial’s business, which includes refineries in Alberta and Ontario, had profits of $343 million versus just $46 million a year earlier. The refineries ran more reliably and benefited from cheaper crude.
Imperial’s chemical business had a record quarter with profits of $66 million, up from $39 million a year earlier.
The upstream side of the business, which includes vast oilsands operations around Fort McMurray and Cold Lake, Alta., had weaker performance for some of the same reasons the downstream thrived.
The impact of lower prices for both synthetic crude oil, and the bitumen from which it’s derived, was about $200 million. Higher royalties and operating costs were also a drag. Overall, upstream net income was $532 million, 12 per cent lower than a year earlier.
Bitumen production from the Kearl oilsands mine averaged 78,000 barrels per day during the quarter. Without two weeks of planned maintenance work factored in, production would have averaged 92,000 barrels per day. The mine’s planned capacity is for 110,000 barrels per day.
CIBC World Markets analyst Arthur Grayfer said Kearl performed better than expected.
“This is encouraging and suggests the company is on track to consistently achieve capacity around year end,” he wrote in a note to clients.
An $8.9-billion expansion project that would add another 110,000 barrels per day to Kearl is 97 per cent complete. It’s currently tracking ahead of its schedule of starting up in late 2015.
In August, Imperial and its partner Kinder Morgan announced they’re doubling the capacity of their planned Edmonton rail terminal to 210,000 barrels per day. The terminal would enable Alberta crude to get to market on trains as major pipeline proposals remain mired by delays. It’s on track to start up early next year.
Imperial shares rose more than three per cent to $53.42 in late morning trading on the Toronto Stock Exchange.
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