Imperial Oil shares drop on lower profits; CEO says Venezuelan situation has little impact.
Imperial Oil, a Canadian oil company, saw its share price fall Friday due to a 'lower' fourth-quarter profit. However, the CEO of the company expressed confidence that the company would be able to withstand any changes in crude flow that might occur as a result of the current situation in Venezuela.
Imperial shares fell 4.5% by midday, as the market responded to the company’s decline in earnings from the previous year. Imperial attributed this to lower oil prices globally in the third quarter and the wet weather in October that led to production issues at the Kearl oil-sands mine in northern Alberta.
On a conference phone, CEO John Whelan stated that Kearl's issues have been resolved and Imperial is confident in their plan to
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Capital expenditures and upstream production by 2026
He said that the capture by the U.S. of Venezuelan President Nicolas Maduro, on January 3, has not had a significant impact on the company.
Canada, which is the fourth largest oil producer in the world, has expressed concern about Venezuela's situation. Trump said that the U.S. plans to "control Venezuela's revenue and oil sales indefinitely"
Lifting some sanctions
Venezuelan oil industry, to make it easier to sell crude oil by U.S. companies.
Venezuela produces heavy crude that is very similar to Canada's. Market fears that Venezuelan barrels may replace Canadian barrels on the U.S. Gulf Coast have led to an increase in the discount for Canadian heavy oil during the past month.
Whelan stated that while there are still many uncertainties surrounding Venezuela, it will take a long time for the investment conditions to improve in the country, allowing production levels to increase significantly.
He said that the initial reaction of the market to the Venezuelan situation could have been overreaction.
Whelan stated, "I think Canada has a major role to play in the global balance of supply and demand, regardless of what happens in Venezuela."
Imperial announced that it will cut its workforce from?20% to?20% between now and 2027 as part of a major reorganization that will ultimately close?most its presence in Calgary, the oil and gas city.
Whelan stated Friday that the restructuring process is underway and proceeding according to plan.
Imperial's production upstream for the quarter was 444,000 barrels of crude oil equivalents per day (boepd), down from 460,000 boepd one year ago.
The net income dropped to C$492 ($364.31million), or C$1.00 a share, for the quarter ending December 31, from C$1.23billion, or C$2.37 a share, last year.
(source: Reuters)
