CALGARY — Canadian energy giant Imperial Oil Ltd. said Monday its third-quarter earnings were hit by pipeline problems, maintenance work and currency swings, and said it is retooling its Kearl oilsands project.
The Calgary-based integrated oil and gas company said its quarterly net profit dropped 24 per cent to $418 million from the $547 million recorded during the same 2009 period.
The earnings amounted to 49 cents per share, down from 64 cents per share during the year-ago quarter.
Analysts polled by Thomson Reuters were on average expecting earnings of 51 cents per share.
Imperial’s (TSX:IMO) revenues rose to $5.85 billion from $5.56 billion.
“Although third quarter earnings were lower, underlying business operations remained strong across all segments of the company,” the company said in a release.
Over the summer, there were two leaks on pipelines operated by a U.S. affiliate of Enbridge Inc. (TSX:ENB), the biggest shipper of Canadian oil. As a result, the flow of oilsands crude into the U.S. Midwest market was reduced during the quarter.
The Calgary company operates and owns a minority stake in the Syncrude Canada Ltd. oilsands development in northern Alberta, the largest oilsands project in the world.
Imperial estimates the pipeline problems squeezed third-quarter earnings by about $60 million.
Other major oilsands players were also expected to feel the impact as well. Last week oilsands producer Cenovus Energy Inc. (TSX:CVE) said the Enbridge pipeline outages led to a $50-million cash-flow hit.
Planned maintenance work at Syncrude — the enormous oilsands mine in which Imperial has a 25 per cent stake — reduced earnings by about $90 million.
And a stronger Canadian dollar dealt a $70-million blow to Imperial’s bottom line.
Also Monday, Imperial said it would reconfigure its Kearl oilsands mining project, which is currently under construction northeast of Fort McMurray, Alta.
The changes would minimize facility requirements and reduce the plant’s footprint.
“The overall production profile and total resource developed at Kearl remain relatively unchanged for the reconfigured project,” the company said.
Capital spending on the first phase of the project is expected to be higher, but Imperial did not say by how much.
Imperial, majority owned by Texas-based ExxonMobil Corp. (NYSE:XOM), has vast operations in Alberta’s oilsands, refineries in Alberta and Ontario and a chain of about 2,500 Esso-branded fuel retail outlets across Canada.
In addition to Syncrude and Kearl, Imperial’s oilsands presence also includes vast steam-driven operations at Cold Lake. The company is planning to build a 30,000-per-day expansion there called Nabiye.
The company is the lead partner on the Mackenzie Gas Project, a long-stalled proposal to connect natural gas fields in the Northwest Territories to southern markets.
The National Energy Board’s final decision on the project, originally expected in September, has been delayed by a few months. Even so, Imperial has said gas will not flow for several years.
Imperial shares dropped a penny to $39.21 on the Toronto Stock Exchange Monday afternoon.