Imperial Oil reports massive loss

By Catherine Griwkowsky February 3, 2021

Imperial Oil announced a fourth-quarter net loss of $1.15 billion, driven largely by undeveloped assets.

The company reported a $1.17-billion non-cash impairment charge, a financial term found on corporate balance sheets when they experience a large loss in the value of their assets.

This follows Imperial’s previously announced decision not to develop a significant amount of its unconventional oilsands portfolio.

Instead, the company said it is focused on its key oilsands assets, including the Kearl project, which produced an average of 284,000 barrels per day in the fourth quarter, beating its previous all-time record.

“The past year has proved an exceptionally challenging one, not only for the company and our employees but society-at-large,” Imperial Oil CEO Brad Corson said in a news release. “Against significant headwinds, Imperial’s operational performance and cost management efforts have exceeded expectations.”

Meanwhile, the Globe and Mail reports Imperial Oil is planning an alternative way to get Western crude to Ontario in the event that Enbridge Line 5 is shut down by Michigan Governor Gretchen Whitmer.

The company’s year-end statement noted the UCP’s accelerated cut to the corporate tax rate “did not have a significant impact on the company’s financial statements.”

In 2019, when the firm was profitable, it accounted for $662 million worth of savings because of the province’s earlier reduction to the corporate income tax. In 2020, it received $70 million from the Canada Emergency Wage Subsidy.

The dismal fourth-quarter losses for the Calgary-based company were echoed by its U.S. affiliate ExxonMobil, which told investors Tuesday that the company lost $20.1 billion in the fourth quarter. It’s the first time the company has seen an annual loss since Exxon and Mobil merged in 1999, CNN reports.