Imperial Oil is eliminating a second annual turnaround at its Kearl oil sands project in Alberta beginning this fall, canceling a planned September outage amid improved reliability and performance, company executives said during a second-quarter earnings call July 30.
¿No está registrado?
Reciba alertas diarias y avisos para suscriptores por correo electrónico; personalice su experiencia.Registro
"We are implementing a new strategy this year to extend intervals between turnarounds at Kearl. Consequently, we will only have a single annual turnaround starting this year, which we just completed, instead of the two we have typically had in the past," CEO Brad Corson said. "So, the Kearl turnaround that was originally planned for September-October this year has now been canceled."
The extended turnaround strategy was implemented a year ahead of schedule, Corson said, and contributed to the company raising its 2021 production guidance for the field by 10,000 b/d to 265,000 b/d. Imperial also raised its 2021 production outlook at its Cold Lake project 5,000 b/d to 135,000 b/d.
September Western Canadian Select crude at Hardisty differentials were heard falling July 30 on news of the increased output guidance, a continuation of recent bearishness against the basis.
WCS Hardisty was heard to trade as weak as at a $14.75/b discount to the NYMEX WTI Calendar Month Average, the common basis for Canadian grades. The heard value midmorning was significantly weaker than the July 29 assessment at WTI CMA minus $14.00/b and late July 29 indications of trading around minus $14.50/b. One trading source attributed the dip to the Imperial Oil news.
Canadian heavy segment differentials have seen steady declines in forward-cycle trading since July 9. In the assessments since, WCS Hardisty differentials have fallen $1.95 against the WTI CMA.
Imperial's total upstream production averaged 401,000 barrel of oil equivalents per day in the second quarter, up from 347,000 boe/d in 2Q 2020 but down 31k boe/d from the first quarter due largely to planned turnaround work at Kearl, Corson said.
Kearl production averaged 255,000 boe/d during the second quarter, up from 190,000 boe/d from second quarter 2020, while the company's Cold Lake project averaged 142,000 b/d in the three months ended June 30, up from 123,000 the year prior. Syncrude production fell to 47,000 b/d from 50,000 during the prior year as a result of turnaround activity.
THROUGHPUT, UTILIZATION RISE
Refinery throughput averaged 332,000 b/d in the quarter, up from 278,000 b/d during the same period in 2020, and refinery utilization averaged 78%, up from 66% year-ago. Product sales averaged 429,000 b/d, an increase of 72,000 b/d from second quarter 2020.
Turnaround work at the Strathcona refinery had an impact on runs of around 70,000 b/d, Corson said, totaling $90 million in both costs and marginal impacts. In total, turnaround work at the company's Kearl, Syncrude and Strahcona refinery projects had a collective impact of $400 million on second-quarter earnings, Corson said.
Total net income for the quarter was $366 million, an increase of $892 million from the same period in 2020, when the company posted a $526 million loss.