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Imperial Oil Limited was incorporated in 1880 and is a Canadian energy company, which is active in all phases of the petroleum industry, including the exploration for, production and sale of crude oil and natural gas, synthetic oil and bitumen. In Canada, it is a major producer of crude oil, the largest petroleum refiner and a leading marketer of petroleum products. It is also a major producer of petrochemicals. The company refines raw hydrocarbons into about 650 petroleum products such as gasoline, diesel, heating oil, natural gas, lubricants, and chemicals used to make plastics. Imperial Oil offers these products and services to consumers across Canada as well as in export markets. The company is a leading marketer of fuels, lubricants, asphalts and specialty products.

The company operates in three main segments: Upstream, Downstream and Chemical. Upstream operations include the exploration for, and production of crude oil, natural gas, synthetic oil and bitumen. Downstream operations consist of the transportation and refining of crude oil, blending of refined products and their distribution and marketing. Chemical operations consist of the manufacturing and marketing of various petrochemicals. Exxon Mobil Corporation owns 69.6 percent of the outstanding shares of the company. So, the retail segment of the company is presented by brands Esso and Mobil.

According to its Annual Financial Report total revenue of Imperial Oil increased up to $34,964 million (Canadian Dollars) or by 20% in 2018 from to $29,125 million in 2017.

Net income in 2018 amounted to $2,314 million or $2.86 per share in 2018 and presented an increase of $1,824 million or 372% compared to net income of $490 million or $0.58 per share in 2017. Results from the previous year included upstream impairment charges of $566 million. Net income in 2017 amounted to $490 million due to impairment charges of $289 million associated with the Horn River development and $277 million with the Mackenzie gas project. This compares with net income of $2,165 million or $2.55 per share in 2016, which included a gain of $1.7 billion from the sale of retail sites.

Gross oil-equivalent production averaged 383,000 barrels per day, up 8,000 barrels per day from 2017. Refinery averaged 392,000 barrels per day, up 9,000 barrels per day from 383,000 barrels per day in 2017. Petroleum product sales were 504,000 barrels per day in 2018, up from 492,000 barrels per day in 2017.

Corporate and other expenses were $189 million in 2018, compared to $79 million in 2017. The majority of these costs are allocated to the operating segments.

Cash flow generated from operating activities was $3,922 million in 2018, up by $1,159 million or by 42% from $2,763 million in 2017, compared with $2,015 million in 2016.

Investing activities used net cash was $1,559 million in 2018, compared with $781 million used in 2017 and $1,947 million in 2016, reflecting higher additions to property, plant and equipment.

Cash used in financing activities was $2,570 million in 2018, compared with $1,178 million used in 2017. One of the financing activities during 2018 was the purchase of about 48.7 million shares for $1,971 million, including shares purchased from the Exxon Mobil Corporation.

Capital and exploration expenditures totalled $1,427 million in 2018, compared to $671 million in 2017, and recorded an increase of $756 million or 112% from 2017. Investments were primarily related to growth activities of the Upstream segment for development of unconventional assets, investment in supplemental crushing capacity at Kearl, and progressing the Aspen project. In 2019, capital expenditures are expected to range between $2.3 billion to $2.4 billion, including about $800 million associated with the Aspen project.

Segmentally, the company achieved the following financial results:

Upstream segment recorded a net loss of $138 million in 2018 compared to a net loss of $706 million in 2017. Improved results reflect the absence of impairment charges of $566 million, higher Kearl volumes of about $210 million and favourable foreign exchange effects of about $50 million. A net loss of $706 million in 2017 was reflected by impairment charges of $289 million for the Horn River development and $277 million for the Mackenzie gas projects. Excluding these impairment charges, the net loss of $140 million compares to a net loss of $661 million in 2016.

Downstream net income amounted to $2,366 million in 2018, up $1,326 million from 2017, a best-ever result excluding gains on asset sales. Higher earnings primarily reflect stronger margins of about $1,530 million.

Chemical segment recorded net income of $275 million, the second best in company history, and represented an increase of $40 million versus the previous year, reflecting higher margins and volumes. Chemical net income was $235 million in 2017, and $187 million in 2016, mainly due to stronger margins.

Average daily production of total bitumen increased to 293 thousands of barrels per day in 2018 from 288 thousands of barrels per day in 2017. Average daily production of Synthetic oil recorded 62 thousand barrels per day in 2018 and remained consistent with production volumes in 2017. Average production of liquids increased slightly from 5 to 6 thousands of barrels per day in 2017 and 2018, respectively. The company’s average daily production of natural gas reported 129 million of cubic feet per day in 2018 compared to 120 million of cubic feet per day in 2017.

In 2018 the Company’s average unit sales price and average unit production costs by product type were $37.56 per barrel ($39.13 in 2017) for bitumen, $70.66 per barrel ($67.58 in 2017) for synthetic oil, $40.20 per barrel ($38.49 in 2017) for liquids, including crude oil, condensate and NGLs, and $2.43 per thousand cubic feet ($2.58 in 2017) for natural gas.

In 2018, bitumen unit production costs were $29.39 per barrel ($26.81 in 2017). In 2018, bitumen unit production costs were higher, primarily driven by Kearl costs associated with improving reliability. Synthetic oil unit production costs reported $60.34 per barrel ($58.96 in 2017). In 2018, synthetic oil unit production costs were higher, primarily driven by higher maintenance costs. Total oil-equivalent bases including liquids, bitumen, synthetic oil and natural gas unit production costs amounted $35.28 per barrel ($32.96 in 2017).
 
The company expects worldwide economic growth of 3% per year, with economic output nearly doubling by 2040. As economies and populations grow, and as living standards improve for billions of people, the need for energy is expected to continue to rise.