Canada's Imperial Oil surpasses profit expectations on record production and strong refining

Canada's Imperial Oil announced a higher-than-expected profit for the third quarter on Friday. Record production and refinery output offset lower crude oil prices.

Canadian oil sands companies such as Imperial Oil, have been resilient in the face of a global oil downturn. They have done so because they have invested for years and are now among North America's low-cost producers.

Imperial, which is majority owned by Exxon Mobil said that its upstream production from July to September rose 3.4%, reaching 462,000 barrels of crude oil equivalent per day. This was the highest quarterly output for over 30 years.

The company's record production at Kearl and Cold Lake, as well as its steady output at Syncrude and Cold Lake, drove this.

Imperial's downstream segment was able to run at 98% efficiency, compared with 90% last year. The total throughput volume also increased 9.3%, to 425,000 bpd in the third quarter.

Tariffs and lower commodity prices have weakened the economy, but record upstream production, efficiency gains and steady refinery performance have helped to counteract this.

Peer Cenovus Energy reported a quarterly profit increase on Friday. This was also helped by a record production rate and a near-full utilization of the refinery.

The global crude oil prices have fallen this year because of increased production from the OPEC+ group and uncertainty in trade policy. Western Canada Select crude dropped 11.6% in the third quarter to $54.62 a barrel.

Imperial's quarter included C$306m after-tax impairment of the Calgary campus, and C$249m after-tax restructuring charges.

Imperial announced in September that it would reduce its workforce by around 20% by the year 2027 as part of a major reorganization. This would ultimately lead to the closure of most of Imperial's presence in Calgary, the oil and gas city.

According to data compiled and analyzed by LSEG, the Calgary-based company reported an adjusted profit per share of C$2.17 for the quarter that ended on September 30. This compares with analysts' estimates of C$1.92 a share. (1 Canadian dollar = 1.4024 dollars) (Reporting and editing by Leroy Leo in Bengaluru, Khusbu Jena & Pooja Menon)

(source: Reuters)