Imperial Estimates $1.27B in CAPEX for 2024

Imperial Oil Limited has projected its 2024 capital spending at $1.27 billion (CAD 1.7 billion), as the company focuses on maximizing the value of its existing assets and progressing high-value growth opportunities while continuing to reduce company emissions.

“Over the next year, Imperial is positioned to deliver key milestones on strategic goals as we continue to profitably grow volumes at Kearl, begin producing from industry’s first solvent-assisted SAGD [steam-assisted gravity drainage] project with Cold Lake Grand Rapids, and advance construction on Canada’s largest renewable diesel facility at our Strathcona refinery”, Imperial Chairman, President and CEO Brad Corson said in a statement Monday. “Our strategic investments and continued focus on cost efficiencies have positioned Imperial to generate robust free cash flow over a range of business conditions and we remain confident in our ability to deliver on our commitments to shareholders”.

In Imperial’s Downstream division, the company continues the construction of the Strathcona Renewable Diesel facility, with production expected to begin in early 2025. In the Upstream division, key projects include the SAGD redevelopment of the Leming field and high-value drilling opportunities at Cold Lake, as well as further volume enhancement initiatives, including secondary bitumen recovery technology, and continued progression of work on the in-pit tailings project at Kearl, the company said.

Imperial said production is forecast to be between 420,000 and 442,000 gross oil equivalent barrels per day (bpd) in its Upstream division, reflecting the multi-year volume growth and cost optimization journey at Kearl to profitably deliver annual production of 280,000 total gross bpd, as well as the accelerated ramp-up of the first phase of the Grand Rapids (GRP1) project at Cold Lake. The company noted that the GRP1 project is expected to deliver 15,000 gross bpd at full production and is designed to reduce greenhouse gas emissions intensity by up to 40 percent compared to current steam technology.

Meanwhile, in its Downstream division, Imperial forecasts throughput to be between 385,000 and 400,000 bpd with capacity utilization between 89 and 92 percent. The company is planning to complete turnarounds at all three of its refineries in 2024, which includes scope to enable the co-processing of vegetable oils alongside conventional feedstock at Strathcona refinery. The planned turnarounds are anticipated to have a modestly higher impact on throughput but at a lower cost in comparison to 2023 turnaround activity.

Imperial said it continues to focus on further improving its advantaged Canadian downstream business by “leveraging its coast-to-coast logistics network to efficiently move product to high-value markets, maximizing refinery crude and product slate flexibility to improve resiliency and further developing its lower-carbon product offering to meet the needs of customers across Canada”.

In a recent report from Statistics Canada, the nation’s oil and gas extraction industries deployed CAD 10.6 billion ($7.85 billion) in capital during the third quarter, up 1.68 percent from the prior three-month period and 12.76 percent from the same quarter last year. Total capital expenses for the oil and gas extraction industries for the first three quarters of 2023 rose 20 percent year-on-year, the agency reported.

“Imperial supports Canada’s vision for a lower-emission future and our plans reflect our aggressive pursuit of high-value opportunities that help reduce emissions and grow production and improve profitability for our shareholders”, said Corson. The company cited carbon capture and storage (CCS) through the Pathways Alliance and the development of next-generation solvent recovery technologies at Cold Lake as examples of its low carbon initiatives.

The Pathways Alliance, a group of Canadian oil sands developers that includes ConocoPhillips Canada and Suncor Energy Inc., is advancing a CCS project in the oil province of Alberta as the biggest priority in a multi-project program to curb emissions from operations. The plan is to connect multiple oil sand facilities to the CCS hub planned to be built in the Cold Lake region, where captured carbon dioxide from the facilities would be permanently sequestered. The project could cut CO2 emissions by about 10 million metric tons to 12 million metric tons per annum (MMtpa) by 2030 and up to 40 MMtpa by 2050, according to the alliance.

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