About Imperial Oil
Imperial Oil Limited (Imperial) operates as an integrated oil company in Canada. The company is a subsidiary of Exxon Mobil Corporation (ExxonMobil). The company is one of Canada’s largest integrated oil companies. It is active in all phases of the petroleum industry in Canada, including the exploration for, and production and sale of, crude oil and natural gas. In Canada, it is a major producer of crude oil, the largest petroleum refiner, a leading marketer of petroleum products, and a major producer of petrochemicals. The company also pursues lower-emission business opportunities including carbon capture and storage, hydrogen and lower-emission fuels. Segments The company operates through three main segments: Upstream, Downstream, and Chemical. Upstream segment Upstream operations include the exploration for, and production of, crude oil, natural gas, synthetic crude oil and bitumen. All of the company’s reported reserves are located in Canada. Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels. All reported production volumes were from Canada and are calculated at a pressure base of 14.73 pounds per square inch absolute at 60 degrees Fahrenheit. Exploratory and development activities regarding oil and gas resources Cold Lake In 2022, additional wells were drilled on existing phases. In 2023, an infill development drilling program is planned within the approved development area to add productive capacity. Additionally, in 2022, the company approved the budget for the Leming steam-assisted gravity drainage (SAGD) project that will re-develop the original pilot area of the Cold Lake field, with development activities to commence in 2023 and start-up planned in 2024. The company also conducts experimental pilot operations to improve recovery of bitumen from wells by means of new drilling, production or recovery techniques. Aspen, Cold Lake Expansion and Other Oil Sands Activities In October 2018, the company received regulatory approval for the Aspen solvent-assisted, steam-assisted gravity drainage (SA-SAGD) project from the Alberta Energy Regulator. Development was proposed to occur in two phases, each producing about 75,000 barrels per day, before royalties. Construction began late in the fourth quarter of 2018. In March 2019, the company slowed the pace of development given market uncertainty stemming from the Government of Alberta’s temporary mandatory production curtailment regulations and other industry competitiveness challenges. In August 2018, Imperial received regulatory approval from the Alberta Energy Regulator for an expansion project at Cold Lake to develop the Grand Rapids interval using SA-SAGD technology, capable of producing 50,000 barrels per day before royalties. Imperial intends to develop the Grand Rapids reservoir through capital-efficient investments that make use of available steam capacity from existing plants, with the initial phase of Grand Rapids development planned as an extension from the Nabiye plant. In April 2022, the Grand Rapids Phase 1 (GRP1) project was approved by the company's board with a forecasted average production of 15,000 barrels per day before royalties. Development activities are planned to be completed by year-end 2023. Work progresses on technical and technology evaluations to support potential Clarke Creek, Corner, Clyden and Chard in-situ development regulatory applications. The company also has interests in other oil sands leases in the Athabasca region of northern Alberta. Evaluation wells completed on these leased areas established the presence of bitumen. The company continues to evaluate these leases to determine their potential for future development. Montney and Duvernay The company owned a 50 percent interest in XTO Energy Canada, which included Montney and Duvernay unconventional assets located in central Alberta. On August 31, 2022, jointly with ExxonMobil Canada, Imperial sold its interests in XTO Energy Canada to Whitecap Resources Inc. The sale completed the marketing effort announced in January 2022, and is consistent with Imperial’s strategy to focus upstream resources on key oil sands assets and its commitment to deliver long-term value to shareholders. The assets included 567,000 net acres in the Montney shale, 72,000 net acres in the Duvernay shale and additional acreage in other areas of Alberta. Net production from these assets was about 140 million cubic feet of natural gas per day and about 9,000 barrels of crude, condensate and natural gas liquids per day. The sale of the assets followed the company's ramp down of drilling activity and adjustment of long-term development plans in 2020 and 2021. Beaufort Sea The company holds a 25 percent interest in two exploration licences in the Beaufort Sea. In 2016, the Federal Government of Canada declared Arctic waters off limits to new offshore oil and gas licences for five years subject to review at the end of that period. Existing licences were not impacted. In June 2019, the Federal Government approved selective changes to the Canada Petroleum Resources Act to prohibit and freeze the existing licences through the completion of the Beaufort Regional Strategic Environmental Assessment (BR-SEA) review. In 2022, the prohibition was extended to December 31, 2023 with a second one-year extension. During this time, the Federal Government plans to finalize the BR-SEA for public release which will be subject to a stakeholder review period that will aim to address regional social, environmental, economic and spill response impacts of natural resource development in the Arctic. The company continues to hold the licences while maintaining community engagement and participation in the BR-SEA process. The company continues to evaluate other undeveloped, mineable oil sands acreage in the Athabasca region. Present Activities Review of Principal Ongoing Activities Kearl Kearl is a joint venture established to recover shallow deposits of oil sands using open-pit mining methods to extract the crude bitumen, which is processed through extraction and froth treatment trains. The company holds a 70.96 percent participating interest in the joint venture and ExxonMobil Canada Properties holds the other 29.04 percent. The product, a blend of bitumen and diluent, is typically shipped to the company’s refineries, Exxon Mobil Corporation refineries and to other third parties. Diluent is natural gas condensate or other light hydrocarbons added to the crude bitumen to facilitate transportation by pipeline and rail. During 2022, the company’s share of Kearl’s net bitumen production was about 157,000 barrels per day and gross production was about 172,000 barrels per day. Total gross production for Kearl was about 242,000 barrels per day (172,000 barrels Imperial’s share), down 21,000 barrels per day (14,000 barrels Imperial's share) compared to 2021, as a result of extreme cold weather impacts in the first quarter of 2022. In 2022, the company successfully completed the startup of the second Boiler Flue Gas Unit, incorporating learnings from the first unit's startup in 2021. This technology recovers waste heat from a boiler’s combustion exhaust to pre-heat process water. Cold Lake Cold Lake is an in-situ heavy oil bitumen operation. The product, a blend of bitumen and diluent, is typically shipped to the company’s refineries, Exxon Mobil Corporation refineries and to other third parties. During 2022, net bitumen production at Cold Lake was about 106,000 barrels per day and gross production was about 144,000 barrels per day. Cold Lake has expanded its commercial application of Liquid Addition to Steam for Enhanced Recovery (LASER), with the technology being applied to approximately 10 per cent of production, resulting in reduced greenhouse gas emissions compared to traditional CSS technology. Syncrude Syncrude is a joint venture established to recover shallow deposits of oil sands using open-pit mining methods to extract crude bitumen, and then upgrade it to produce a high-quality, light (32 degrees API), sweet, synthetic crude oil. The company holds a 25 percent participating interest in the joint venture. The produced synthetic crude oil is typically shipped to the company’s refineries, Exxon Mobil Corporation refineries and to other third parties. In 2022, the company’s share of Syncrude’s net production was about 63,000 barrels per day. The gross production was about 77,000 barrels per day, which is an increase of about 6,000 barrels per day compared to 2021, supported by the interconnect pipeline. The Province of Alberta, in its capacity as lessor of Kearl, Cold Lake, and Syncrude oil sands leases, is entitled to a royalty on production. Royalties are subject to the oil sands royalty regulations which are based upon a sliding scale determined largely by the price of crude oil. Land Holdings As of December 31, 2022 and December 31, 2021, the company held the following oil and gas rights, and bitumen and synthetic crude oil leases, all of which are located in Canada, specifically in the western provinces, in the Canada lands and in the Atlantic offshore. Western Provinces The company’s bitumen leases include about 161,000 net acres of oil sands leases near Cold Lake and an area of about 34,000 net acres at Kearl. The company also has about 68,000 net acres of undeveloped, mineable oil sands acreage in the Athabasca region. In addition, the company has interests in other bitumen oil sands leases in the Athabasca areas totalling about 173,000 net acres, which include about 62,000 net acres of oil sands leases in the Clyden area, about 34,000 net acres of oil sands leases in the Aspen area, about 30,000 net acres of oil sands leases in the Corner area, about 29,000 net acres in the Clarke Creek area and about 18,000 net acres in the Chard area. The 173,000 net acres are suitable for in-situ recovery techniques. The company’s share of Syncrude joint venture leases covering about 55,000 net acres accounts for the entire synthetic crude oil acreage. The company holds interests in an additional 395,000 net acres of developed and undeveloped land in the western provinces related to crude oil and natural gas. In 2022, the company divested its interest in Horn River totalling about 103,000 net acres and its interest in XTO Energy Canada totalling about 365,000 net acres. Canada Lands Land holdings in Canada lands primarily include exploration licence (EL) acreage in the Beaufort Sea of about 252,000 net acres and significant discovery licence (SDL) acreage in the Mackenzie Delta and Beaufort Sea areas of about 183,000 net acres. Exploration licences on Canada lands have a finite term. If a significant discovery is made, a SDL may be granted that holds the acreage under the SDL indefinitely, subject to certain conditions. The company’s net acreage in Canada lands is either continued by production or held through ELs and SDLs. Atlantic Offshore Exploration licences on Atlantic offshore have a finite term. The Atlantic offshore acreage is continued by production licences or held by SDLs. Downstream Downstream operations consist of the transportation and refining of crude oil, blending of refined products and the distribution and marketing of those products. Supply and Trading The company supplements its own production of crude oil, condensate and petroleum products with substantial purchases from a number of other sources at negotiated market prices, in addition to undertaking trading activities. Purchases and sales are made under both spot and term contracts from domestic and foreign sources, including ExxonMobil. Transportation Imperial transports the company’s crude oil production and third-party crude oil required to supply refineries by contracted pipelines, common carrier pipelines and rail. To mitigate pipeline capacity constraints, the company has developed rail infrastructure. The Edmonton rail terminal has total capacity to ship up to 210,000 barrels per day of crude oil. Refining The company owns and operates three refineries, which process predominantly Canadian crude oil. The company purchases finished products to supplement its refinery production. Distribution The company maintains a nationwide distribution system to move petroleum products to market by pipeline, tanker, rail and road transport. The company owns and operates fuel terminals across the country, as well as natural gas liquids and products pipelines in Alberta, Manitoba and Ontario and has interests in the capital stock of two products pipeline companies. Marketing The company markets petroleum products throughout Canada under well-known brand names, most notably Esso and Mobil, to all types of customers. Imperial supplies petroleum products through Esso and Mobil-branded sites and independent marketers. At the end of 2022, there were about 2,400 sites operating under a branded wholesaler model, in alignment with Esso and Mobil brand standards, whereby Imperial supplies fuel to independent third parties. Imperial also sells petroleum products, including fuel, asphalt and lubricants, to large industrial and transportation customers, independent marketers, resellers, as well as other refiners. The company serves agriculture, residential heating and commercial markets through branded fuel and lubricant resellers. In 2022, improved petroleum product sales primarily reflects increased demand. In 2021, improved petroleum product sales primarily reflects reduced impacts associated with the COVID-19 pandemic. Chemical The company’s Chemical operations manufacture and market benzene, aromatic and aliphatic solvents, plasticizer intermediates, polyethylene resin, and markets refinery grade propylene. Its petrochemical and polyethylene manufacturing operations are located in Sarnia, Ontario, adjacent to the company’s petroleum refinery. The company’s total petrochemical sales volumes during the three years ended December 31, 2022, were as follows. Chemical operations consist of the manufacturing and marketing of various petrochemicals. The company is one of Canada’s largest integrated oil companies. It is active in all phases of the petroleum industry in Canada, including the exploration for, and production and sale of, crude oil and natural gas. In Canada, it is a major producer of crude oil, the largest petroleum refiner, a leading marketer of petroleum products, and a major producer of petrochemicals. The company also pursues lower-emission business opportunities including carbon capture and storage, hydrogen and lower-emission fuels. Research and Development The company’s net research and development costs charged to expenses were $74 million in 2022. History Imperial Oil Limited was founded in 1880. The company was incorporated under the laws of Canada in 1880 and was continued under the Canada Business Corporations Act (the CBCA) by certificate of continuance dated April 24, 1978.
