Imperial Oil Limited · TSX:IMO
Imperial Oil — Investor Day (April 2014)
121 slides from Imperial Oil's investor day presentation, Apr 1, 2014
Slide 1: Form 8-K Current Report
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 1, 2014 IMPERIAL OIL LIMITED (Exact name of registrant as specified in its ch
Slide 2: Item 8.01 Other Events
Item 8.01 Other Events. On April 1, 2014, Imperial Oil Limited (the “Company”), hosted an investor meeting in Toronto, Ontario at which senior management gave a presentation (the “Presentation”) that provided an update on the Company’s current operations and major projects. The Presentation included
Slide 3: Signatures
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. IMPERIAL OIL LIMITED Date: April 8, 2014 By: /s/ William J. Hartnett ____________________________________
Slide 4: Investor Days
Exhibit 99.1 Investor Days April 1 - 2 , 2014
Slide 5: Agenda
Agenda 9:30 a.m. Welcome John Charlton, Manager, Investor Relations Executive Summary Global Energy Outlook Rich Kruger, Chairman, President and CEO Corporate Overview Downstream & Chemical Paul Masschelin, Senior Vice-President, Finance BREAK (10 minutes) Upstream Rich Kruger Future Opportunities P
Slide 6: Cautionary statement
Cautionary statement Statements of future events or conditions in these materials, including projections, targets, expectations, estimates, and business plans are forward-looking statements. Actual future results, including demand growth and energy source mix; production growth and mix; project plan
Slide 7: Executive summary
Executive summary 4 | Imperial | Investor Days | 2014
Slide 8: Business overview
Business overview Participation in all aspects of the value chain Sarnia refinery Syncrude mining Kearl mining Strathcona refinery Cold Lake cyclic steam Nanticoke refinery Research Sarnia Fuels & Lubes marketing chemicals 5 | Imperial | Investor Days | 2014
Slide 9: Competitive assessment
Competitive assessment Industry leadership across all business lines Cold Lake Best-in-class operating performance; continued growth potential Syncrude High-value production; improvement actions ongoing Kearl Next generation mining technologies; ramp-up to capacity continuing Refining Advantaged fee
Slide 10: Business environment
Business environment Favourable investment climate, but not without challenges • Large, accessible upstream resources • Mature, competitive downstream markets • Political stability, competitive fiscal regime • Market access limitations, uncertainties • Tight labour market, regional cost pressures •
Slide 11: Organizational priorities
Organizational priorities Manage risks, maximize value and achieve profitable growth • Focus on base business fundamentals Safety…Operational Integrity…Reliability…Profitability • Implement asset-specific improvement plans • Ensure quality execution on growth projects • Engage externally on key indu
Slide 12: Global energy outlook
Global energy outlook 9 | Imperial | Investor Days | 2014
Slide 13: A worldwide view to 2040
A worldwide view to 2040 2 billion more people on the planet 130 percent larger global economy about 35 percent greater demand for energy non-OECD countries lead the growth in demand about 60 percent of demand supplied by oil and natural gas natural gas to surpass coal as the second-largest fuel sou
Slide 14: Demand for all energy sources to increase
Demand for all energy sources to increase Global energy demand Quadrillion BTUs 250 2040 200 2010 150 100 50 0 Oil Gas Coal Nuclear Other Source: ExxonMobil 2014 Outlook for Energy; other includes biomass/waste, hydro and other renewables 11 | Imperial | Investor Days | 2014
Slide 15: Oil sands production to continue to grow
Oil sands production to continue to grow North American liquids mbd Demand Canadian Oil Sands Net Imports Biofuels Other Petroleum Crude & Condensate Source: ExxonMobil 2014 Outlook for Energy 12 | Imperial | Investor Days | 2014
Slide 16: Corporate overview
Corporate overview 13 | Imperial | Investor Days | 2014
Slide 17: Business model
Business model Deliver superior, long-term shareholder value • Long-life, competitively advantaged assets • Disciplined investment and cost management • Integration and synergies • High-impact technologies and innovation • Operational excellence and responsible growth ExxonMobil relationship 14 | Im
Slide 18: Imperial - ExxonMobil relationship
Imperial - ExxonMobil relationship Significant benefits that provide a unique competitive advantage • Benefits to Imperial – Personnel development – Operational best practices – Technology sharing – Scale-related synergies • Commercial transactions – On terms competitive to those with unrelated part
Slide 19: Enterprise risk management
Enterprise risk management Comprehensive systems to manage business risks 16 | Imperial | Investor Days | 2014
Slide 20: Personnel safety
Personnel safety Safety is first in all we do Workforce safety Incidents per 200,000 hours worked 1 Goal “Nobody Gets Hurt” 0.5 0 Industry Imperial 17 | Imperial | Investor Days | 2014
Slide 21: Financial performance
Financial performance Results demonstrate the strength of our business model Net income $/share 5 2013 Downstream & Other Earnings - $ billions 2.8 Upstream 4 Earnings - $ per share1 3.32 ROCE - % 12.9 3 Gross production2 - koebd 295 2 Refining throughput - kbd 426 Cash flow - $ billions 3.3 1 Inves
Slide 22: Business segment profitability
Business segment profitability High performing upstream and downstream businesses 2013 Upstream profitability 2013 Downstream profitability $/oeb $/bbl 20 20 15 15 10 10 5 5 0 0 IMO SU CVE HSE SU IMO CVE HSE Source: Barclays Research 19 | Imperial | Investor Days | 2014
Slide 23: Industry-leading return on capital employed
Industry-leading return on capital employed Maximizing investment value and life-cycle performance 2013 5-year average % % 20 20 15 15 10 10 5 5 0 0 IMO SU HSE CNQ CVE IMO CVE HSE CNQ SU Source: company publications 20 | Imperial | Investor Days | 2014
Slide 24: Unmatched shareholder distributions
Unmatched shareholder distributions $13 billion returned to shareholders in last 10 years 2004-2013 Distributions $ billions 15 Share reductions 10 Dividends 5 IMO HSE SU CNQ CVE 21 | Imperial | Investor Days | 2014
Slide 25: Long-life, high-quality proved reserves
Long-life, high-quality proved reserves 3.6 billion oil-equivalent barrels, concentrated in world-class assets YE 2013 proved reserves billion oeb1 4 Other Syncrude 3 Cold Lake 2 1 Kearl 0 Year-end 2012 1after royalties 22 | Imperial | Investor Days | 2014
Slide 26: Large resource base
Large resource base 18 billion oil-equivalent barrels, up 10% in 2013 YE 2013 resource base billion oeb1 20 Other Gas 15 Growth Contingent opportunities Resource 10 Mining Liquids 5 Progressing Probable In situ Proved Committed 0 1after royalties 1 2 3 4 23 | Imperial | Investor Days | 2014
Slide 27: Significant growth investments
Significant growth investments Spending $40+ billion this decade concentrated on upstream projects Average annual capex $ billions 6 5 4 3 2 1 0 2000-2009 2010-2014 2015-2020 Includes Upstream, Downstream, Chemical & Corporate 24 | Imperial | Investor Days | 2014
Slide 28: Production positioned to double
Production positioned to double 200 kbd of additional liquids capacity in funded projects Production outlook koebd1 600 New Opportunities Not yet Oil Sands - mining funded Oil Sands - in situ 400 Conventional Under construction Ramping up 200 Existing 0 2013 2016 2020+ 2020+ 1before royalties 25 | I
Slide 29: Large cap growth comparison
Large cap growth comparison “We estimate Imperial will exhibit the strongest per share growth in the peer group over the next several years, driven in large part by its expansions at Kearl.” - Peters & Co. Estimated cash flow per share growth - % 20 IMO 15 CNQ HSE 10 Median: 7% SU 5 CVE 0 Median: 12
Slide 30: Downstream & Chemical overview
Downstream & Chemical overview 27 | Imperial | Investor Days | 2014
Slide 31: Integration & synergies
Integration & synergies Delivering competitive advantage across the full value chain Production Refining Chemical Crude oil and natural gas Petroleum products Commodities and specialties 28 | Imperial | Investor Days | 2014
Slide 32: Downstream & Chemical strategies
Downstream & Chemical strategies Maximizing the value of every molecule • Consistently deliver best-in-class performance • Provide valued and high-quality products and services • Lead industry in operating efficiency and effectiveness • Selectively invest for advantaged returns 29 | Imperial | Inves
Slide 33: Refining & Chemical
Refining & Chemical Canada’s largest refiner, integrated chemical facility • Strathcona, Sarnia, Nanticoke Capacity: 421 kbd • Sarnia Chemicals 2013 sales: 940 KT Efficient, well-positioned assets Integrated, advantaged feedstocks Leveraging global best practices 30 | Imperial | Investor Days | 2014
Slide 34: Strong cash flow with selective investments
Strong cash flow with selective investments More than $6 billion of net cash generated over the last 5 years Downstream & Chemical net cash Downstream & Chemical capex $ billions % of depreciation 150 2 100 1 50 0 0 2009 2010 2011 2012 2013 2004-2008 2009-2013 31 | Imperial | Investor Days | 2014
Slide 35: Maximizing refining value
Maximizing refining value Lowering costs through advantaged feeds and energy efficiencies Mid-continent crude Indexed energy intensity % of throughput % 100 100 Industry Imperial 75 95 50 90 25 85 0 80 2010 2012 2014 2002 2012 Source: Solomon data, indexed 32 | Imperial | Investor Days | 2014
Slide 36: Leveraging ExxonMobil global best practices
Leveraging ExxonMobil global best practices Unique technical, operational and commercial support networks Systematic approach to achieve operational excellence: Personnel safety Energy efficiency Facility reliability Manufacturing optimization Strathcona Nanticoke Sarnia Chemical 33 | Imperial | Inv
Slide 37: Strong Chemical performance
Strong Chemical performance Top-tier polyethylene producer, low-cost feedstock, specialty customers Feedstock Indexed volume & unit margin % % Cost 100 200 Ethane High Margin Propane Volume 150 Marcellus ethane Ethane 50 100 Refinery Refinery off gas off gas 50 Low 0 0 2009-2013 2014+ 2009 2010 2011
Slide 38: Fuels & Lubricants marketing
Fuels & Lubricants marketing World-class brands, extensive distribution system • 1,700 sites; 470 company-owned • Marketing brands: • 2013 sales: 454 kbd Concentrated in premium markets High capability distributor network Profitable partnerships 35 | Imperial | Investor Days | 2014
Slide 39: Marketing excellence
Marketing excellence Leading market share in all product segments Market Market share position Wholesale fuels 24% #1 Retail1 18% #2 Aviation 35% #1 Marine 30% #1 Asphalt 35% #1 Lubricants 27% #1 1Source: Q4 2013 Kent Market Share All others estimated based on Statistics Canada data and company info
Slide 40: Retail value proposition
Retail value proposition Profitably fulfilling customer needs, industry-leading performance Esso rank Retail margin Retail measure vs. industry Site contribution #1 Non-fuel margin #1 Non-fuel Net site cash cost #1 Fuel Non-fuel Fuel Source: 2012 MJErvin Benchmarking. Participants: Imperial, Chevron
Slide 41: Break
Break 38 | Imperial | Investor Days | 2014
Slide 42: Upstream overview
Upstream overview 39 | Imperial | Investor Days | 2014
Slide 43: Upstream strategies
Upstream strategies Operational excellence and profitable growth • Maximize value of existing production • Invest in projects that deliver superior results • Enhance resource value through high-impact technologies • Pursue the highest quality exploration opportunities 40 | Imperial | Investor Days |
Slide 44: Cold Lake: a world-class in situ operation
Cold Lake: a world-class in situ operation Industry-leading performance, further growth potential • 100% Imperial, 1st production in 1985 • 4,500 wells, 150 kbd1 production • 1.7B bbls 2P, 3.3B bbls contingent1 Large, high quality resource base Highly efficient operation Significant long-term growth
Slide 45: Industry-leading reliability
Industry-leading reliability Achieved through comprehensive, systematic approach 2013 reliability % of capacity IMO Cold Lake CVE Foster Creek CVE Christina Lake SU Firebag CNQ Primrose HSE Tucker Lake 0 20 40 60 80 100 Source: Peters & Co. Limited 42 | Imperial | Investor Days | 2014
Slide 46: Competitive cost structure
Competitive cost structure Achieved through operational integrity, life-cycle cost discipline 2013 cash operating costs $/bbl HSE Tucker CVE Foster Creek SU Thermal IMO Cold Lake CVE Christina Lake CNQ Thermal 0 5 10 15 20 25 Source: FirstEnergy Capital Corp. 43 | Imperial | Investor Days | 2014
Slide 47: Increasing resource recovery
Increasing resource recovery Achieved through technology, innovation and operational best practices 80 Cold Lake demonstrated recovery % 2010+ 60 2000’s 40 1990’s 1980’s 20 1970’s 0 Thermal Pilots Commercialization Megarow Limited entry Liquid addition First horizontal of cyclic steam steaming perfo
Slide 48: Nabiye project status
Nabiye project status Target start-up remains year-end 2014 • Funded in 2012 for $2 billion − 280 million bbls, 40 kbd production1 − 7 pads of 24 wells each − 140 kbd steam generation − 170 MW cogeneration • “Design one, build multiple” replicates Mahkeses 12P Reserves, gross, before royalties 45 |
Slide 49: Cold Lake production forecast
Cold Lake production forecast Long-life plateau, significant growth potential kbd1 300 200 100 0 2013 2018 2023 2028 2033 1before royalties 46 | Imperial | Investor Days | 2014
Slide 50: Syncrude: a pioneer in oil sands mining
Syncrude: a pioneer in oil sands mining Strategic asset with improvement potential • 25% Imperial, 1st production in 1978 • Synthetic crude, 70 kbd production1 • 1.2B bbls 2P, 1.6B bbls contingent1 High-value production Competitive performance Intense improvement focus 1 IMO share, before royalties
Slide 51: Competitive performance
Competitive performance Targeted efforts to improve 3-year average capacity utilization % 100 80 60 40 20 0 Shell Syncrude Suncor CNRL Capacity 255 kbd 350 kbd 350 kbd 115 kbd Source: FirstEnergy Capital Corp. 48 | Imperial | Investor Days | 2014
Slide 52: Focused on increasing production
Focused on increasing production Priority is to improve reliability of existing facilities Syncrude production kbd1 80 • Operating procedures 60 • Equipment monitoring 40 • Facility maintenance 20 • Coker feed stability • Sustaining projects 0 2009-2013 2017 2020 Average 1IMO share 49 | Imperial | I
Slide 53: Executing sustaining projects
Executing sustaining projects Projects being delivered on schedule, on budget Average capex per year $ millions1 600 500 400 Aurora North Mine Relocation Aurora North Tailings Management $0.9 billion2 | Complete $0.8 billion2 | Complete 300 200 100 0 2006-2010 2011-2015 2016-2020 Mildred Lake Mine R
Slide 54: Driving organizational effectiveness
Driving organizational effectiveness Delivering cost reductions, building capabilities Syncrude workforce employees 6000 • Strengthening leadership structure • Enhancing asset team accountability 5000 • Increasing workforce training • Expanding best practice networks • Leveraging IMO/XOM support 400
Slide 55: Kearl: the next generation oil sands mine
Kearl: the next generation oil sands mine Establishing new performance standards • 71% Imperial, 2013 initial start-up • 220 kbd gross funded capacity1 • 3.6B bbls 2P, 1.0B bbls contingent1 Large, high-quality resource Proprietary froth treatment Environmental improvements Competitive cost structure
Slide 56: Initial development update
Initial development update All three trains operational, ramping up to capacity Kearl bitumen production kbd, gross1 80 60 40 20 0 2Q13 3Q13 4Q13 1Q14 1100%, before royalties Est. 53 | Imperial | Investor Days | 2014
Slide 57: Kearl production successfully marketed
Kearl production successfully marketed 19 refineries have processed to-date • First processed in Imperial and ExxonMobil refineries • Sales to third parties began in 4Q13 • No operational issues • Market demand continues to be strong 54 | Imperial | Investor Days | 2014
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Slide 59: High resource quality
High resource quality A life-cycle unit cost advantage Athabasca undeveloped mining resources ore grade, % bitumen Increasing Mining 12.0 Efficiency 11.5 Kearl Processing Increasing Efficiency 11.0 10.5 10.0 9.5 12 11 10 9 8 7 Source: Regulatory applications Total volume to bitumen in place ratio 56
Slide 60: Proprietary froth treatment
Proprietary froth treatment Producing pipeline-quality crude without an on-site upgrader Sediment and water Existing mines Bitumen Synthetic crude “Naphthenic” froth treatment Onsite Refinery upgrader Sediment and water Bitumen Kearl Dilbit “Paraffinic” Diluent froth treatment Refinery Asphaltenes 5
Slide 61: Improved environmental performance
Improved environmental performance Wells-to-wheels GHGs about the same as average crude refined in U.S. % 125 Production Refining Distribution Combustion 100 75 50 California Mining synthetic Venezuela Kearl Average barrel Mexico Heavy crude oil Boscan Dilbit refined in U.S. Maya Source: IHS CERA, “
Slide 62: Efficient cost structure
Efficient cost structure Sustain production at capacity, drive efficiencies Unit cash operating costs $/bbl1 Expected 30 range 20 10 Initial Initial + Expansion Full Capacity 1before royalties 59 | Imperial | Investor Days | 2014
Slide 63: Kearl Expansion Project
Kearl Expansion Project 60 | Imperial | Investor Days | 2014
Slide 64: Kearl Initial Development to Kearl Expansion Project video
* earl Initial Development to Keatl Expansion Project Watch the video on Imperial’s YouTube channel. , * YouTube.com/ImperialOil
Slide 65: Kearl expansion project status
Kearl expansion project status On schedule and on budget for start-up in 2015 Relative progress % complete 100% Same design as KID 80% Initial (KID) Same major contractors Expansion (KEP) 20% 60% Full-size modules in Edmonton 40% Lessons learned from start-up 20% Improved performance 0% 1 13 25 Mont
Slide 66: 40+ year asset life
40+ year asset life Expansion potential to 345 kbd Kearl development plan kbd1 400 300 Expansion/Debottleneck – evaluating 125 kbd 200 Expansion Project – under construction 110 kbd 100 Initial Development - producing 110 kbd 0 2013 2050 1gross, before royalties 63 | Imperial | Investor Days | 2014
Slide 67: Market access strategy
Market access strategy Ensure take-away capacity for all equity crude • Optimize use of existing systems to maximize value • Participate in multiple new pipeline opportunities • Use rail options to bridge and provide contingency • Mitigate any future surplus via portfolio optimizations 64 | Imperial
Slide 68: Industry transportation costs
Industry transportation costs Significant value in minimizing transportation costs Alberta to U.S. Gulf Coast $/bbl, indicative 25 20 15 10 5 0 Committed Walk-up Efficient Inefficient pipeline pipeline rail rail 65 | Imperial | Investor Days | 2014
Slide 69: Pipeline projects
Pipeline projects Production and refining requirements covered Commitments to new capacity kbd 400 • Currently transporting 400 kbd from Alberta 300 • Secured 390 kbd of additional capacity 200 − Base Keystone − Gulf Coast Access − Keystone XL 100 − Trans Mountain − Energy East 0 2014 2016 2018 66 |
Slide 70: Rail projects
Rail projects Capability to bridge gaps due to apportionment and pipeline timing • Edmonton rail loading terminal − Joint venture with Kinder Morgan − Strategically located − 100-250 kbd unit train capacity − In service early 2015 • Additional facilities − 20 kbd Strathcona Cold Lake loading − 30 kb
Slide 71: Future opportunities
Future opportunities 68 | Imperial | Investor Days | 2014
Slide 72: Research & technology
Research & technology World-class facilities, unmatched commitment IMO $1 billion Houston Calgary Upstream Upstream annually XOM Paulsboro Sarnia Downstream Downstream 69 | Imperial | Investor Days | 2014
Slide 73: Oil sands research
Oil sands research A history of success, new technologies being advanced In situ In situ Mining SA-SAGD CSP NAE Solvent-assisted Cyclic solvent Non-aqueous SAGD process extraction Deliver performance improvements and long-term value 70 | Imperial | Investor Days | 2014
Slide 74: 300+ kbd new in situ potential
300+ kbd new in situ potential Development planning activities ongoing Resource potential 300,000 net acres 4.7 billion barrels1,2 Top-tier quality Enabling technology SAGD / SA-SAGD Potential scope 9+ phases 35-45 kbd per phase Regulatory process First application in 2013 1 IMO share, before royalt
Slide 75: In situ growth video
Imperial’s | Watch the video on | situ growth perial’s YouTube channel. [2 eee x mab YouTube.com/ImperialOil
Slide 76: Aspen project
Aspen project 1.1 billion barrels potential, regulatory application submitted • Three phases, 45 kbd each • “Design one, build multiple” • SAGD/SA-SAGD technology • Regulatory filing: December 2013 • Progressing technical definition Resource potential consists of 0.4 billion bbls 2P Reserves and 0.7
Slide 77: Unconventional gas opportunities
Unconventional gas opportunities Large acreage position, development optionality Resource potential 540,000 net acres ~20 TCF potential1,2 Liquids-rich Montney/Duvernay Development options Large-scale export project Drilling for North American market Plans Evaluate existing acreage Assess potential
Slide 78: LNG
LNG Early stages of evaluating the competitiveness of an export project Government engagement Celtic acquisition Scoping facility February 2013 size & cost Fiscal and Resource Pipeline Liquefaction Shipping Regas Market Regulatory Evaluating pipeline options Site evaluation ongoing Export license Cu
Slide 79: Final comments
Final comments 76 | Imperial | Investor Days | 2014
Slide 80: Long-term potential
Long-term potential Opportunities to produce 1 million barrels per day by 2030+ Production outlook kboed1 1before royalties 77 | Imperial | Investor Days | 2014
Slide 81: Factors impacting pace of further growth
Factors impacting pace of further growth Project Competitiveness Technology Market Advancements Conditions Regulatory Financial Environment Considerations 78 | Imperial | Investor Days | 2014
Slide 82: Business model
Business model Deliver superior, long-term shareholder value • Long-life, competitively advantaged assets • Disciplined investment and cost management • Integration and synergies • High-impact technologies and innovation • Operational excellence and responsible growth ExxonMobil relationship 79 | Im
Slide 83: For more information
For more information www.imperialoil.ca Twitter /ImperialOil YouTube /ImperialOil LinkedIn /Imperial-Oil For more detailed investor information, or to receive annual and interim reports, please contact: John A. Charlton Manager, Investor Relations Imperial Oil Limited 237 Fourth Avenue SW Calgary, A
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Slide 85: Exhibit 99.2 2014 Investor Day Presentation
Exhibit 99.2 2014 Investor Day P R E S E N T A T I O N John Charlton - Imperial Oil Limited - IR Manager Good morning and welcome. My name is John Charlton and I'm the Investor Relations Manager for Imperial Oil. This morning, Imperial's senior management will take you through all aspects of our bus
Slide 86: Script: company history and future
You know the history of the company, an incredible history. You increasingly understand our future which I would characterize as very bright. You're familiar with it. We participate in all aspects of the value chain, upstream, downstream, chemicals, fuels and lubes, research. We have about 5,500 emp
Slide 87: Script: business environment
Certainly, the accessibility, size and quality of the resource base is a strong advantage. In the downstream or in mature competitive markets we need to be very selective about what we do. Still very profitable but you need to be cautious on investments and investment pace. Political stability, comp
Slide 88: Script: energy outlook
I'll give you a little bit of a distillation of it. Comprehensive analysis, if I put it all on one page, here's that page, worldwide view. The outlook is that between 2010 and 2040, the world's population will grow from about 7 billion people to 9 billion, that the world's economy would more than do
Slide 89: Script: ExxonMobil relationship
of integration and synergies that enables our assets to achieve more than they would as an individual collection of assets. Technology and innovation are a key part of our business today, as well as the value of our business in the future. Foundation is operational integrity and responsible growth a
Slide 90: Script: risk and personnel safety
Imperial managers are of the roll-up their sleeves variety. It’s a hands-on game. Our folks are very involved and engaged. And we – our executives, our management team, understand their businesses at great length, and are very involved in the execution, managing risk, and value creation aspect. I wa
Slide 91: Script: performance versus competition
I'll talk more about ROCE here in a later slide to give you a sense of what's going on and what we may expect. The one thing I'd flag here is the 12.9% includes significant assets under construction that are weighing down that ROCE, and I'll quantify that here shortly. Now, let me talk about our per
Slide 92: Script: resource base
some of our assets, most notably Cold Lake, I'll show you what we've done over time to continue to improve and add value. In addition to our proved reserve base, we have a very large total resource base -- at 18 billion barrels, essentially five times our proved reserve base. You can look at the dis
Slide 93: Script: Downstream overview
So, with that serving as a corporate overview, I'd like to turn it over to Paul, and Paul will continue the discussion on our downstream and chemicals business. Paul Masschelin - Imperial Oil Limited - SVP - Finance, Administration & Controller What I'd like to do over the next couple of slides is t
Slide 94: Script: Downstream cash flow and feedstocks
We do understand that these price dislocations are temporary, and as such, we do not deviate from our focus on reliability and cost efficiency because what that also means that at bottom of the cycle conditions, these businesses will deliver double digit returns If you move to the chart on the right
Slide 95: Script: Chemicals and fuels marketing
If you shift to the right hand side on this chart, ongoing feedstock optimization alone was providing strong support to our customers given that what we are selling is a premium grade of polyethylene has allowed us to expand unit variable margin significantly over the past five years. Let me shift f
Slide 96: Script: Cold Lake
Cold Lake, a little bit of an overview of it. Cold Lake, folks, is -- can't be described as anything other than a world- class operation. I will show you here on the next several slides, but it is industry leading performance across the board, and the nice thing is we're not done yet. We’ve produced
Slide 97: Script: Nabiye and Syncrude
better. And that's what 5,500 people at Imperial Oil look to do each and every day, and I think this growth in Cold Lake is one of the best testaments I can offer. And what I would ask you to do is hold that thought, remember it, five minutes from now when I'm talking about Kearl. The next phase of
Slide 98: Script: Syncrude reliability
we ended the year strong. And I believe as you see first quarter results in the weeks ahead, I think you'll see that there was continued strong performance in the first quarter. Now, a quarter or two does not an asset life make, so we're focused on the areas on the right dealing with operating proce
Slide 99: Script: Syncrude teams and training
We've taken Syncrude and adopted this model, split it into eight distinct teams; five that deal with processing, fluid coking, hydroprocessing; three that deal with reliability froth production, et cetera, maintenance and inspection to bring about a greater level of clarity and accountability deeper
Slide 100: Script: Kearl marketing
This asset is going to be around a long time. We're learning very rapidly on it and I remain very confident that it will perform at or better than anything we've described in terms of the expectations on it. Let me continue. One of the questions is how would the Kearl production be received in the m
Slide 101: Script: Kearl site tour
We're just downstream of the ore preparation plant so we're standing beside one of the two hydro transport lines. Each of them carries 50% of the flow. But again, one pipe can carry up to around two thirds of the flow of the plant throughput. It's generally expected that every three or four months y
Slide 102: Script: Kearl reliability
Jim Suggett – Imperial Oil Limited - Kearl Operations and Reliability Manager Right here we've implemented a continuous monitoring system for thickness on the pipeline. It basically is continuously monitoring the thickness all the way around the pipe and sending the signal or the results wirelessly
Slide 103: Script: Kearl emissions and costs
full gamut, a barrel of Kearl has essentially the same greenhouse gas emission footprint as the average barrel refined in the U.S. today. That is a significant departure from the historic and certainly, the reputation of the oil sands. This is something that we need to help people understand more. I
Slide 104: Script: Kearl expansion project
Kearl expansion project was sanctioned in December 2011 and the approach was to design one, build multiple. It's being able to take a project, use the same design elements, the same contractors and go do it again. The Kearl expansion project is basically going to double production from Kearl initial
Slide 105: Script: Kearl expansion contractors
Don Cook - HCB&I - Project Manager My name is Don Cook. I'm project manager with HCB&I here at the Kearl site. On the froth settling units for the Kearl expansion project we did not change the design but we did change the execution as far as we took some of the piping and installed it on FSUs at the
Slide 106: Script: market access
the most capitally efficient that it can be. In any case, we would expect it to be more capitally efficient than the first two phases but that's a bit of a -- to be determined. I want to talk about market access strategy plans to how as we grow this production, how we're going to get it to market. T
Slide 107: Script: future opportunities and research
Paul Masschelin - Imperial Oil Limited - SVP - Finance, Administration & Controller Indeed, I'd like to make a couple comments on the future opportunities which we are working on as we look towards the next decade of growth for Imperial. The pursuit of technology development and innovation continues
Slide 108: Script: in situ potential
With 300,000 net acres of future in situ projects, Imperial has the potential to add 4.7 billion barrels of top quality resource to its reserves. By 2030, up to 45% of Imperial's production could come from future in situ developments. Alberta's oil sands are located in two main areas, Athabasca and
Slide 109: Script: modular construction
In construction, the modules are assembled at a fabrication yard including the pumps, wiring, heating, cooling and piping and then brought to site for assembly building block style. Over 60% of equipment at Aspen would be in modules, reducing field hours by half and the project footprint to 85% of o
Slide 110: Script: long-term growth
believe to continue to grow the business to something that could be a million barrel a day operation in the 20-30 year time period or so, so significant long-term potential. Now, what will determine the pace of any further growth? This schematic just represents there are a lot of factors and that's
Slide 111: Q&A: pipeline capacity
I think there's a lot of variables in that. One of the things the existing pipeline systems in the base case, there's a lot of work going on with Enbridge and TransCanada on looking at some of de-bottlenecks of the de-rating they've had. To bump their capacity, they're looking at some additional pum
Slide 112: Q&A: Kearl sustaining capital
Kearl doesn't have a big upgrader because of the new technology. How much of a savings you get do you think on annual maintenance stay-in-business capital? Rich Kruger - Imperial Oil Limited - Chairman, President, CEO Historically, we've talked about, if I can bring Cold Lake into the mix, maintenan
Slide 113: Q&A: capex outlook
Second question is that when we're looking at your chart earlier on the capex. You're looking at say from 2011 to 2014 and then 2015 to 2020. That is a significant drop. This year the capex is about $5.5 billion on the organic and that you're looking at, say, for the remaining of the decade, in the
Slide 114: Q&A: Kearl expansion ramp-up
All of the lessons on KID have been or are being incorporated on KEP and so what that, you know, my expectation will clearly be and as we wrap up this year and we start talking, next year we'll give you guidance on that, I'm expecting a much quicker, more efficient ramp up on KEP. I think it'd be sa
Slide 115: Q&A: dividend and capital priorities
Rich Kruger - Imperial Oil Limited - Chairman, President, CEO Yes, we look at it every quarter and the priorities haven't changed. We're in this period of funding our major growth projects. On a dividend, what we're looking for is something that you could describe it as reliable and growing. That's
Slide 116: Q&A: market reward for reinvestment
Rich Kruger - Imperial Oil Limited - Chairman, President, CEO How are you doing? You're going to come back with that same question you're trying to get me or a different one? All right, damn, I was all prepared. Unidentified Participant So, looking at you and some of your peers in the Canadian oil s
Slide 117: Q&A: downstream investments
Paul has showed what we're doing. Our priority is ensuring the maximum reliability of our facilities, getting each and every barrel through when we can, very selectively investing. You'd see some talk about conversion capabilities, running heavier crudes versus lighter crude. Our goal is to get the
Slide 118: Q&A: labour and productivity
It was a bit of a bigger issue at the time of KID. And that was one of the reasons the modules were decided to be built offshore. I think we hit KEP at a bit of a sweet spot, a little bit of a low in some others' major activity plans. So, we're not having any, you know, acute issues at all with KEP
Slide 119: Q&A: chemicals feedstock
Yes. You know, it does present an opportunity because it's a significantly lower feedstock. We still have philosophically on growth investments, whether it's upstream, downstream, or chemical. You know, my thought on that is operating organizations need to demonstrate that they can operate what they
Slide 120: Q&A: Kearl crude value
but there, again, that pricing, it depends on the refiner. And if you're trying to make asphalt out of Kearl, it's not as good a crude stream to make asphalt out of as Cold Lake would be, for example. But if you don't have the -- those facilities and asphalt is not what you're looking for, a refiner
Slide 121: Q&A: paraffinic froth treatment
Unidentified Participant As you move towards paraffinic froth treatment in Kearl, would you be using pentane, and if so, is that going to be an adequate supply? Rich Kruger - Imperial Oil Limited - Chairman, President, CEO Yes, we think -- we're not concerned about having a sufficient supply for the