Canadian integrated energy company Imperial Oil Ltd posted a second-straight quarterly loss on Friday, hit by lower crude prices and refining margins as the COVID-19 pandemic dented demand for fuel and related products.
The coronavirus outbreak led to the grounding of flights and brought economies to a standstill, hurting demand for fuel and forcing producers to implement widespread output cuts.
Imperial, majority-owned by Exxon Mobil Corp, said its refineries throughput averaged 278,000 barrels per day, 19 per cent lower than last year, with overall utilization at 66 per cent in the quarter.
Prices for the company’s U.S. crude fell 53.5 per cent to US$27.83 per barrel, while Canadian crude prices dropped about 66 per cent from year-ago levels to US$16.73 per barrel.
The company said it expected lower realized prices for its products to result in substantially lower earnings and cash generated from operations than in 2019, unless conditions improve significantly in the latter half of the year.
It said it might need to book impairment charges on its long-life assets depending on the outcome of an ongoing review.
Next year’s capital budget is likely to be similar to 2020′s, of $1.1 billion to $1.2 billion, as uncertainty about the pandemic remains, Chief Executive Brad Corson said on a conference call.
The company, usually a major rail shipper, moved none of its own crude on trains during the quarter, but sees a possible increase by year-end, Corson said.
Imperial’s average production for the quarter fell 13.3 per cent to 347,000 barrels of oil equivalent per day due to scheduled shutdowns of its Kearl and Syncrude facilities.
The Calgary, Alberta-based company posted a loss of $526 million (US$391.86 million), or 72 Canadian cents per share, for the second quarter, compared with a profit of $1.21 billion, or $1.57 per share, last year.
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