With the price of a litre at the Calgary pump poised to jump this weekend, Imperial Oil Ltd. says it posted its highest first-quarter profit in over 30 years as it earned $1.17 billion, boosted by higher oil prices.
The company also announced plans to buy back up to $2.5 billion of its common shares.
Total revenue and other income amounted to $12.69 billion, up from $7 billion in the first three months of 2021.
Production averaged 380,000 gross oil-equivalent barrels per day in the quarter, down from 432,000 in the same period of 2021 due to extreme cold weather and unplanned downtime at the Kearl oil sands mine.
And if you thought being a billion dollars in the black over one quarter might spare motorists at the pumps, think again..
In Calgary, gas analyst Dan McTeague, president of Canadians for Affordable Energy predicts a seven-cent per litre increase at the pumps as of Saturday.
“Canada could provide some catalyst to producing more of the oil the world desperately needs but we just don’t have to take away capacity,” said McTeague.
“We’ve spent a lot of time in this country saying no to pipelines. Now these proverbial chickens are coming home to roost and they’re hurting consumers, not just at the pumps, but pretty much across the entire spectrum of the economy.”
Birchcliff Energy executive Vice President Dave Humphreys says his company is 80 percent natural gas, the other 20 percent oil-based.
Birchcliff says it’s seeing record profits as well, a stark contrast to this time last year.
“We’re probably making twice the amount of cash flow that we would have forecast,” said Humphreys.
He says that the company is expecting to be debt free this year.
“All of that profit doesn’t necessarily go right back to your oil and gas company. In the middle, there is a layers and layers of taxes in the form of various different government taxes, carbon taxes, all sorts of taxes,” said Humphreys.
“So there’s a lot of people involved in that supply chain that are taking a piece of that pie.”
Humphreys says it will be difficult for energy companies to ramp up production in spite of the high commodity prices, due to staff shortages.
“We’re not going to be able to put our foot on the gas pedal and just drill, complete, equip and tie all of this in within a six month cycle,” he said.
“That isn’t going to happen this time because of logistics, i.e. supply chain issues, labour issues.”
One energy analyst says there are four levels that lead to fuel prices at the pumps for consumers: the price of crude at a global level, the refinery margin, taxes and retail margin for gas stations.
“The refinery margin alone in Alberta has gone up by about six to seven cents, (since February),” said Vijay Muralidharan, Director of Consulting, Kalibrate Canada.
“As a consumer low prices are advantages to me. As a company higher prices advantages to them. We went into the war on Ukraine, where the market is already tight. Add the Ukraine condition to it, it made it worse.”
For Imperial, it says its refinery throughout averaged 399,000 barrels per day, up from 364,000 in the first quarter of last year. Capacity utilization was 93 per cent, up from 85 per cent a year earlier.
(With files from The Canadian Press)
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