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Canadas Imperial oil posts second-quarter loss on coronavirus-led oil slump

August 03/2020

MOSCOW (MRC) -- Canadian integrated energy company Imperial Oil Ltd posted a second-straight quarterly loss, hit by lower crude prices and refining margins as the COVID-19 pandemic dented demand for fuel and related products, said Hydrocarbonprocessing.

The coronavirus outbreak led to the grounding of flights and brought economies to a standstill, hurting demand for fuel and forcing producers to implement widespread output cuts to curb oversupply after oil prices collapsed this year.

Imperial, which is majority owned by Exxon Mobil Corp, said its refinery throughput averaged 278,000 barrels per day, 19% lower than last year, with overall utilization at 66% in the quarter.

Prices for the companys U.S. crude fell about 53.5% to USD27.83 per barrel, while Canadian crude prices dropped about 66% from year-ago levels to USD16.73 per barrel.

The company said it expects lower realized prices for its products to result in substantially lower earnings and cash generated from operations than in 2019, unless conditions improve significantly in the latter half of the year.

Imperials quarterly average production for the quarter fell 13.3% to 347,000 barrels of oil equivalent per day (boepd) due to scheduled shutdowns of its Kearl and Syncrude oil sands deposits to balance near-term output with poor demand.

The Calgary, Alberta-based posted a loss of CD526 million (USD391.86 million), or 72 Canadian cents per share, for the second quarter ended June 30, compared with a profit of CD1.21 billion, or CD1.57 per share, last year.

As MRC informed previously, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

And in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, petrochemistry.
Category:General News
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