CALGARY, Alberta Jan 30 Imperial Oil Ltd's
Kearl oil sands project in northern Alberta produced
less than half its capacity in the fourth quarter, the company
said on Thursday, as harsh winter weather and equipment
reliability problems hampered output.
In its quarterly earnings statement, Imperial said the
C$12.9 billion Kearl mine, which began producing tar-like
bitumen a year ago, produced 52,000 barrels per day, well below
full capacity of 110,000 bpd.
Production did at times reach 100,000 bpd and Imperial said
work to stabilize production at that level was progressing.
The Calgary, Alberta-based company, 69.6 percent owned by
Exxon Mobil Corp, said net income dropped 2 percent to
C$1.056 billion ($947 million) or C$1.24 a share, from C$1.076
billion, or C$1.26 a share, in the fourth quarter of 2012.
Strong downstream earnings from Imperial's refineries helped
offset the impact of weaker-than-expected production, but
analysts said concerns about Kearl were weighing on the share
Imperial shares were last down 0.7 percent at C$45.47 on the
Toronto Stock Exchange.
"The Kearl project has been struggling. Volumes in November
and December were less than October so that has been
disappointing to investors," said Michael Dunn, analyst at
FirstEnergy Capital in Calgary.
Including production from the Cold Lake oil sands project
and its 25 percent share of output from the Syncrude Canada Ltd
joint venture, Imperial produced 329,000 barrels of oil
equivalent per day in the fourth quarter, up from 285,000 boepd
in the same period a year earlier.
The company said higher volumes were the result of Kearl
production ramping up and the acquisition of a 50 percent stake
in Celtic Exploration Ltd last year.
Throughput at the company's three Canadian refineries
averaged 387,000 bpd, down from 468,000 bpd in the fourth
quarter of 2012 as a result of Imperial closing its Dartmouth,
Nova Scotia, refinery.
Imperial Chief Executive Officer Rich Kruger said the
Dartmouth closure helped deliver record quarterly downstream
earnings of $625 million.
"Downstream businesses maximized value by increasing our
refineries' access to price-advantaged Western Canadian crudes,
discontinuing operations at our Dartmouth refinery and
strengthening coast-to-coast retail operations," he said.
The company's refining business benefited from processing
cheap Canadian light crude that traded at a discount to global
crude benchmarks throughout the fourth quarter, while selling
refined products linked to world prices.
Capital and exploration expenditures fell 13 percent to
$1.567 billion in the fourth quarter from $1.793 billion a year