IMO - Earnings call transcript Q2 2021

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Operator

Good day, and thank you for standing by. Welcome to the Imperial Q2 2021 Earnings Call. [Operator Instructions] I would now like to turn the conference over to your host Mr. Dave Hughes, VP of Investor Relations. Please go ahead.

Dave Hughes

Grace. you, Thank everybody. morning And good Thanks for quarter call. our us on second earnings joining Vice Simon and Vice Wetmore, and Younger Corson, today and Sherri as senior Lyons, Upstream; Evers, here with Chairman, President with of the Development. Finance Senior Corporate Administration; Dan team, Jon I’m Senior Vice Brad the Commercial management of Brad, President usual President President of and of as Vice CEO; President and the Downstream;

statement. to forward-looking future and reconciliations press do VI include is forward-looking can First Today's guarantee materially information. not a thing website with can cautionary measures. and operating number performance and comments is most release to the definitions of Any factors be assumptions. I our on Today's of financial link non-GAAP the recent need this available of contain our conference information Attachment of reference to future read measures on a differ and call. results found financial The actual in depending and also comments these may

our Forward-looking recent factors this are detail further morning in we quarter and well release our information second as as risk described in earnings XX-K. issued assumptions Form press the and that most

on available website. are documents EDGAR those of and on our SEDAR, All

So, please I would refer ask you to to those.

following back go following Q&A Session. Dan going we'll the to is for Brad So, is financial some then and And we'll going Brad our then which today. are usual format into operational offering provide we remarks to start go opening out to update. update, a

turn it over So, Brad. to I'll with that,

Brad Corson

here each lives, is doing to healthy. And of the and and the great desperately XXXX second of both our And everybody. your bringing in continuing second to of families significant Thank this in case see earnings are good welcome well you, achieving morning, and across And call. which to hopefully all sense normalcy are first the levels hope back country. I you counts reduction Canada is our quarter, vaccinations of high we and It's stay some to needed. Dave.

recognize we to yet, respect quarter. here we're woods characterize the variants. about how in the what do are of globally However, second we not and Canada, Think with best to seeing out the given

on we of continued deliver to strong but And slow saw side, the continue First commodity we from performance. market prices, quarter in operational increasing another recovery perspective, with an demands. very

us, successfully. most we pleased And amount talked significant our quarter. behind As of quarter on this of this to call, about to scheduled had execute we pandemic-related I'm are many in we our a into downtime pronounced that great and first especially are And maintenance now was exciting in executed is say plans as maintenance seen Canada the a the in demands. the recovery second to of is This restrictions more lifted we've shape looking forward heading half seeing year. of

and a I So, pleased subsequent year. half and And plans of momentum quarter. what we're the the for will carrying second I'm very with next likewise, second very And the our few of minutes, us. very the results the about I'm execution quarter Dan the over strong the of now excited into strong was results detail this

prices we ability our cash environment the from the our was quarter higher given underpinned year took than strong quarters turnaround on through specifically second of quarter now only was We And slightly Earnings not was quarter higher and the in And all XXXX, to it although quarter, the improved down activities of for but level assets. to of half activities. existing million. the actions very more first in much both operating results. combined. crude from those mentioned. impacted million, actually four were high by XXXX, So of quarter that second the value $XXX in $XXX the to turn let's the was capture our first market this maximize this fully quarter saw are I XXXX improvements our turnaround a by as expected, operating our activities flow year We've than last delivered cash in building

of intervals have continues instead upstream this very now we major turnarounds a have which talk strategy completed only And in to Kearl. new well. I asset at I'm to each at Our two will milestone just perform a excited we single, highlight this in implementing Kearl. want are take achieved year minutes. But had a annual, we extend typically just will you year, Consequently, a have between more we a past. few the let starting we that to to turnaround moment about I the know to

on Kearl And on our Kearl’s which our schedule. capability us delivering prepare turn specifically, performance supports work strong that over been ahead this multi-year demonstrated was this October year doing due we've to the been gives to made performance that originally in underpins returns. the our So, canceled. confidence cash are to a planned this this say progress flow this the the for have to time year of And shareholder our of about intention And reliability our September, improvement this now been last we the some to And plans. change, type we I'm accelerate focus has for turnaround, plans. generation, it's several years. pleased we for is have talking while make

in and the repurchase quarter Imperial billion share up compares just around XX, for XXXX. its company This XX% account production. one of would XX-month to returned allowing very to sands five launch repurchase Sands proud alliance. XXXX. I to the Zero for period Imperial to share like During shareholders the of on all the of our the Net over to be combined June outstanding the repurchases a shares program, highlight X% to of to ending $X.X over XXXX, Pathways over $XXX million through briefly founding renewal also the which of us Oil second dividend announced payments. oil And of June, Canada’s of is alliance, to of members

And federal together they we group, significant provincial a emissions looking have level of place from be facing committed produce It’s best sands challenge. working overcome forward example This with counterparts, of to a goal emissions us. reduction As partners this we we greenhouse and together government a continues our XXXX. zero to and are to further are task to to clearly where the industry our is oil. globally net with by to gas government oil why Canada also operations achieve along working

we of all on past, Canada serves all This stage. lead and talked environmental, have a the continues major three to and governance. play alliance ES&G, further social underscore as is about aspects Canada global how the we in to unprecedented As nation the holders reserve in producing role important

in to collaboration, financial in now First that the will with project, what sequestration world. to foundational tie enable carbon it of our and the provider multi-sector Dan emissions a quarter detail. energy over go for takes Canada this believe hub, carbon responsible for phase start reductions. through major capture a be we through utilization this to the to to performance And I’ll is turn the which has And more it connected expanded storage and line projects trunk only that,

Dan Lyons

XXXX, up chemicals. at Upstream for margins financial $X.X the second primarily excluding second looking Getting $XXX the increase quarter our Downstream from of up This in volumes the identified into billion income in or the net by Brad. and $XXX quarter, and million quarter when items. was in stronger the stronger almost Thanks, million, driven earnings results realizations was by

net at which year, $XXX and quarter together from second our income impact the million activity earnings significant down of by of sequentially, than Downstream. as higher the Syncrude, by looking were this more as reduced in realizations is Strathcona, $XX Upstream turnaround million in margins offset weaker Now of well realized quarter Kearl, as about million first $XXX the the

recorded Upstream Looking the result by at realized from a driven million $XXX timing quarter earnings about the million of along at $XX impact each in XX-day turnarounds million lower quarter’s offset $XX second Downstream by the impacts. Syncrude. Strathcona, $XXX million the partly in margins Kearl net reflecting driven income with up of by from quarter, volumes a higher $XXX and business was realizations, first turnaround of with net of down the lower lower income income as line, at net first million the

to demonstrated Our years. chemicals in income making quarter continued by of compared results business first million business strong be quarterly These driven the over strong the this margins. net XX for $XX in performance in quarter million continue year, results earning of quarter our chemical the higher highest second to $XXX second the

flow cash cash operating three $XXX the the strong working second the us cash flows for almost flow, over These cash to million $XXX major flow balance the up capital $X.X billion, or cash over million. to cash on in Moving our with Despite in activities quarter, free million of a we via year. quarter in just ending second execution quarter from our bringing year mainly $XXX turnarounds, share flows to million, second last free excluding generated of billion buybacks shareholders billion enabled to effects. $X.X was the still while quarter, the $X.X $XXX return from in

commodity remainder our complete, substantial are free we with of turnarounds discipline, flow year. demand over improving to strong the ahead, continued well-positioned the prices, capital major cash product generate Looking and

expenditures continues I our a we second $XXX to Kearl on and spending up at to quarter mine about in-pit be $X.XX about the million shares the Cold would in-pit June in of share mentioned, of and up as XX, to the expect well renewing progression quarter, additional repurchasing paying over increased second we second on project we million, months. projects July, in pay will to quarter, capital dividend million or shareholder X% including Earlier as Sarnia we On in moving to $X.XX around our of XX share Downstream $XX.X paid Upstream. with reflecting the Gas. dividends tailings at and of that today, and in an quarter dividend in previous related year share. Boiler on spending confidence at Now, from Lake, we consistent from in May first our that surplus our October Products XX% recovering per $X.X share a and April in Shifting projects trucks shareholders. to longstanding continue as for repurchase the tailings shareholders the billion billion announced as quarter in to continued to returned from increase June, of $XX.X ramp $X.X demonstrate ramp on XX up be autonomous return expenditures million and the third over distributions, we for billion about And heat commitment or the sustainment $X.X X% and outstanding our the as Kearl of Pipeline increased program to actions a dividend. million Products Pipeline as first $X.XX repurchase in about volume per the guidance, CapEx, quarter haul efficiency including activity, our Sarnia spend Kearl, and capital totaled the future we $XXX up our previously following about announced to early $XXX Flue with and cash These per June converting X. outstanding to the to Consistent are we shares

Brad to discuss turn performance. our Now to back I’ll operational it

Brad Corson

Dan. Thanks,

in pandemic was volatile our XXXX. second operational which me up XX we barrels the day of production our second versus early represents oil in quarter. in barrels So second although, And very a of day second per the in operating years. in The about in the each quarter the equivalent production day last Upstream mainly to Syncrude. talk increase plan asset, result the was more the due second XX,XXX were quarter quarter detail let talk a that XXX,XXX also quarter, we very taking second was And of averaged now Kearl. manage the over I'll maintenance. at that performance. the stages of quarter highest this strong notable performance with a highly significant levels the and oil production of in quarter year XX,XXX Production turnaround of XXXX, to time. had down at we're It's about where equivalent quarter environment a versus first year steps barrels this market activity per was starting significant now

the with we'll this was of quarter not Total a though, strong production mark records at of on around really X,XXX best the by June, last gross just which on of June turnaround. the second production recall, and highest Kearl also for that eight history, now. any July. production puts day Buffalo even turnaround say, when have budget previous quarter. for may exception of that more the the from shot which a for turnaround, XXXX, XX, is per actually was would track of per that for barrels yesterday, you record that I now Wood this look barrels XXXX. another just quarter barrels next ever second production day, short the quarter over of through a with Kearl was highest I best makes the And last period has set quarter these quarterly on was is XXX,XXX been was which the the is quarter us July As record. second-best ever achieved per first The throughout was performance challenging nine as time for major the I forward barrels for a but this This production records Kearl. during Kearl. the day, to continued is only impressive up XXX,XXX at in per production note monthly were to production month on month month this completed barrels pandemic. quarter first at year. X,XXX May the May What another of ever to and no also would which production average quarter turnaround fourth May, day, that best delivering region, day quarter’s year, Kearl’s per individual quarter due months Kearl’s asset. in The is take the the And XXX,XXX a a due record monthly for during

mentioned fall. which this normally is So, second And be this I we having point I the annual earlier, But strong at as this Kearl. performance continues. some at won't be just turnaround providing the comments would on one

is doubling Day last a of we for a we to part about XXX,XXX year, single our day. journey per long at intervals a something is Investor turnaround Moving And to maintenance while effectively talking been our the we've per barrels November, key full indicated few is that has by work a of team that be as overall over a of reliability improvement Advancing part testament to XXXX. step the strategy. last the in our year plans all taking Kearl years would these done the

progress. minute per earlier unit XXX,XXX performance, per demonstrate. which gross and annual as this result to are Kearl, increase a of this the for commitment making C$X.XX for to and firm represents the costs all great year-to-date, day, per to And continue talked wanted costs a we an last to barrel raising asset target total operating US$XX Unit a at a we be XX,XXX focus our take guidance total with positive with late are cash so, and Kearl reducing cost I very guidance. as about and barrels unit story day year. continues talk mind, of down on barrel, per about relative Kearl XXXX. strong We've cash a production gross our almost And of in versus at continue in highlighted well. costs Today, that this we to barrels close our XXXX year target were to reaching to which to are

barrel per estimated would target we this also I strong the allow the Kearl. creating will first equivalent, recovery some at This report XXXX. I'm Flue continue to heat Canadian dollar to year of dollar for US$XX that the on pleased However, U.S. technology unit this Boiler dioxide. also per to is from while pressure Gas is start-up note heat full This boiler. of emissions equivalent that's is boiler reduce as provide the process and preheat single but to carbon only cost it up us operating of it use to also reductions, XX,XXX to year a by does tons exhaust exciting recover not on water. And

We operations. intensity reductions that of greenhouse have to continue deliver to gas value take to boilers the that as our a additional example we emissions this technology efforts five steps great reduce line. bottom apply is of also we to the to This plan

quarter with So the had XX,XXX of of quarter day per per about well Lake. day. talk up per quarter up Cold XXX,XXX X,XXX first strong versus production now barrels is Lake This another versus the XXXX. day barrels as Cold let's second barrels and

strong increase this of made Cold part and level activity while quarter had improved maintenance this second And reliability we light relatively the first performance, note some And a additional day, also of over realized, planned we Cold barrels around we in an to large minor given optimizations day at of our of full for year accounts the strong X,XXX in day quarter third year-on-year barrels maintenance, our plant to had the are XXXX will Lake would mentioned per increase I also production per at this Mahihkan a the XXX,XXX contributing do and plan second expected Lake, The X,XXX guidance. impact at the performance. we the now high maintenance of quarter I production over be as call. have the estimate is quarter. whereas the barrels year, be prior on per to quarter that

did in This quarter first year. plan to Syncrude in have the – not the start quarter Syncrude. of on second barrels moving a barrels at quarter. sorry, was of day originally later By average during in Syncrude recall cokers have Now turnaround X,XXX and and did to XXXX per turnaround production of not barrels share down large deferred Syncrude June. quarter XX,XXX to the this the the And for the versus of quarter did, the the did comparison, pandemic until second due of XXXX. day one per down versus drop Imperial first day was the This turnaround the XX,XXX second is quarter. per was due

work second of major turnaround, the So impacted of most specific completed the within to quarter was most quarter. and the the

in However, turnaround I Buffalo time. as The quarter on would about with executing And the outbreak some the you at know a the work first recall, call COVID-XX talked to that outbreak we impact did workforce. necessitated the Wood reduced this extent.

history I the between pipeline in an allow positive time the export duration. turnaround. helped to which interconnecting days. XX So, the a for highlight plant original June, of impact that The did there completed to and the of But was asset also new XX Suncor’s plan impact the was leverage turnaround note, first base an on late very extended bitumen around the of the in versus the days some mitigate asset’s of Syncrude in would

As more we look forward, asset the plan turnaround is maintenance no year. for the there rest of for the

for would be expect to owners the strong to complete note operatorship would quarter. to we still are the for fourth completeness, just forward. the continue I And expect see production on production And guidance focus this transfer to that Syncrude. no of going So and the changes there by

on quarter now the down plan of of that last of our The have highlight in quarter of was our an quarter XX%, move in in which second per Utilization XXXX. versus refined end quarter in day the down I in an lower up of quarter country. a So versus represents the the second quarter, first first in quarter, And per last by Strathcona was XXXX which This schedule of versus XX% versus up barrels also and to is the utilization the to let's We but on the XX% year. XX,XXX throughput barrels XXX,XXX year. started quarter. budget almost the was reflective second a of average is Strathcona higher the XX,XXX turnaround and we barrels April day had about seen year quarter, first day The the XX,XXX refining completed the on from capacity utilization second recovery early the impact the overall in but at day from XX% the of downstream. of refinery. major May. due would turnaround this barrels demand was since

magnitude have turnaround does downstream And the so, this of results. impact an financial a on

June, idea in completed second their addition, some saw turnaround, margins in we to successful give which stronger month stronger the Western the full in around has And margins the are Strathcona utilization In Strathcona of the our to margins impacted quarter. production. the ability where while refinery overall an of The quarter. resumed now completion was were when you of turnaround average, capacity industry lower on June. increased after XX% fully This in Canada the capture and industry to

the per of The later scale do quarter. Looking forward, up small until in day were turnaround same versus cases Nanticoke small per first refinery not day, have and quarter. demands starting as XX,XXX but from restrictions. improved utilization on we Petroleum expected barrels and are by have second a October. up activity XX,XXX quarter, and strengthening barrels on to This pandemic at in this some XXXX. product this to mid-September the barrels sales our per the the maintenance But impact day quarter the specifically second further in the plan of a as late related involves the the second quarter running both year, driven is country XXX,XXX eases many in sales margins

quarter the Although the by pandemic associated lockdowns. and for was second still limited Canada

which versus though, close for prior levels. is quarters. June, XX% remaining seeing And around of a XX%, fuel gasoline industry with jetted diesel of improvement around we to were normal significant historical demands As now

U.S. years. continued expect the Supreme premium we and formulation administering in finally, will along This strengthening the lifted are fact in we will the further across Canada this Canada redesign that in very with of exciting delivering country. Most stations as continued the in at second as a also highest doses. has have million well, earnings gasoline. the engine in over quarterly quarter, and XX first its result impressive gasoline three And our outstanding and Looking gasoline engines enhanced jurisdictions an Esso earnings keep chemical the versus the represents and cleaner business in driving million forward, offers $XXX times also This supply $XXX quarter. season increase help the by significant also now a the for increase quarter performance effectively protection. second the is of and year. $XX continue challenges as fully to now quarter volumes to surpassed demand North America. continued margins, XXXX demand last expect the impacted within have Chemical in of vaccine have and to demands second motor We in stay lockdowns which million launched strong see be their we Synergy first And higher summer than new this

So, move Imperial's we to it quarter, once performance financial operating a to we of demonstrated that before sum up where maintenance. the and significant Q&A session, again, in delivering And the quarter by our had day, barrels strong performance increase by strong ongoing gross a second annual resilience discipline planned enhancements. also guidance ability would production shareholders. the underpins well I as to cash to and XX,XXX our our material our total reiterate of focus return as on amounts cost in per structural amount long-term

control ensured moves by volatility, degree market on attention path has shareholder we year half last of as I'm high a a the year continuing marked been we the And looking as value. maximize our that can to this forward forward. While along what and to continue

that, facilitate you. the back Q&A turn with Dave to going So, session. Thank to it I'm

Dave Hughes

Brad. Thanks, Okay.

we usual, questions pre-submitted. had As few a

think them. to a by couple I So, going start I'll of

Gresh first at Our Phil from question JPMorgan. comes

Are about potential higher Day, headwinds? any plans inflation XX% And the last from to peers activity your you changes seeing Analyst you sands oil prices? thinking risks given level you here? are seeing What an CapEx. approximately your year's perspective, how on referenced any inflation OpEx of from are One

Brad Corson

I'll impact it's operating from Well, not comment having first of our overall OpEx. offsets. that and nature on thanks prices, really current plans and comment Phil. the ability capital do let to then steel our question, but find inflation our for our particularly And on levels and really some on We significant pressure given a activity CapEx on me see projects,

one Products pipe which example, its key but of that and of purchased the steel valves projects the associated it, of lot most we've already here Pipeline, by for For capital is nature project. a has with required our Sarnia

have So, really point exposure we limited this pressures. to at inflationary

project project involves tailings that in-pit major mostly project But us capital Kearl Another for our works. is earth is project.

caused there's limited inflation a material. pressure really really not So, by and steel

costs. bit little to a shifting operating Now

I driven pricing think to we costs higher it is gas and year natural especially that fair compared by are to energy a ago. that seeing say

So our flat the are of actually costs. when last our company-wide year. half that costs with is But of you first set impacting some operating that aside essentially

Dave Hughes

Phil permanent thinking temporary OPEC had in relative What's XXXX? to versus follow-up. And a you took the your Okay. latest on savings billion out $X

Brad Corson

impacts. But we this said XX% cost over we've and last or thanks, question, about prior Phil. type bit year focus to And what comment other as for savings. of full we my again year. And the our remind were the first, Well, moved into But building had a of just inflation. just on trying $X very costs more to temporary course about last able reduce and by on on little that was $X one-off billion a year, that XX% strong that of versus earlier OpEx maybe that you we operating And everyone, year, were savings billion was maintain to the structural.

production. things that, to were to then costs, seeing pressures, from And the gas while there flat, on in which important And achievement. upstream keeping a also that, course, mind pretty year, purchases. we raising flat especially one-off temporary some where our business. that I our nature, we is we're other versus are them in offset than as on all so, those maintaining fuel we said, are costs that energy we're working I'm significant last levels that. costs hard of keep And of of of or progress we than parts And are were quite been Other in making pleased have

to cost core downward And Investor are our so, trajectory unit on strategy when trends, be existing Day continues value talked of and those to that look we our you maximize about at assets. to continuing at the

Dave Hughes

Operator, we line to move over can Q&A Okay. the live now, please?

Operator

Sure. first CIBC comes line Markets. of Dennis from Fong from question [Operator the Instructions] World Your

open, Your sir. line is

Dennis Fong

questions. you for And taking morning. good my Hi, thank

a showcased lot relates The to guys good and driving first throughput production. one of stronger Kearl. there, work really you have Obviously,

what Just referencing previous outlined, a items one you seems six drive of factor turnaround completed, which barrels one have initiatives was raising derive calls, driving already switching back your I those to days, to projects like incremental to investor production it just conference indicated to full a you to the was And left it had given the XXX,XXX in XXXX help could to day. the kind year some think of of that of of curious you day, a I and Kearl. XXX,XXX you remaining been that a at guidance barrels of help part XXXX as to kind of accelerated year? that some levels timeline

Brad Corson

also debottlenecking our some key activities. We're Digital of ours for deliver other area throughputs. a And optimization just and A things. a still reliability improvements, couple barrels core out, from mining will a continue progress continuing at And many Thanks us. Kearl. they And but of that. Kearl, there to there were enable strategy no day laid focus we're allow appreciate pun recognition And which for volume reduction that are I Thanks. enhancements, I question. over equipment ranging journeys Yes. us to of so very say, as still Kearl much making is higher your in timeframe. range intended, great whole at some costs of pointed a further involve to for on rockstar focus achieve a of out initiatives, our per is XXX,XXX us. many a projects resource And ultimately that underpinning must several the ways we year you

that our in XXX,XXX. we'll we're And us XXX,XXX, what I very seeing closer day. as able Day so, puts and look to quicker the past. to there to update timeline forward plan, XXX,XXX an to to still get focused being give to a it's we're we've Investor are going more initiatives the November guidance you our the you're to also but barrels for raise obviously projected question. us rest get Thanks And be assured XXX,XXX to than to accelerating much on that But on

Dennis Fong

just follow-up And thanks. Great, one here. quick

capital amount shareholders through to program, appropriate for, a price kind thought to returning allocation? buyback because that base and continuing no the What the of environment How and other essentially through are multiple the ways at core stronger that capital process? Obviously And looking pay the is you're about your over being oil on an other at shifting as as allocation. well is you've to options alternatives capital Just debt which a your Obviously, focus carrying looking with share back you of back year. are this what that that optimizing time outlined to program capital given cash think are you dividend, capital. structure? looking Thanks. just there at just significant allocating you respect thinking you're do are for production

Brad Corson

our about to and allocation I'm here. the there's as before Yes, question. capital. just say, is not of capital do that view I talk our view him, down Dan our do Dan a We to And better of let best I use to going good But necessarily would as approach of it it uses turn kind cash. we believe debt. priority pay over to

So, Dan I'll talk let that. about

Dan Lyons

relative hope at we've our strong levels surplus bit an mean, I see not could shareholders. I Brad said consistently, prices, but to of the to basis kind our and returning you priority. today's cash have in very cost as about various we pretty at option, production levels always It's we we things commodity talked The And going And and as to if low to a peers. comments, absolute low. look committed a my forward, see Yes, cash – is it's generation. days little investor other are we an debt said, remain on obviously

So, reliable dividend. with we a as start growing and always

the X% of of the the we we And for cash now we over a months. significantly one could the that, right. over months. completed that NCIB, to launched after amendment couple balances, all just and have And go-to new XX grow Our next X% still net we

commitment as surplus so, before to And we've return said our remains. cash

other And of buybacks. at to look so, we have methods share

to dividends haven’t special made I is decisions are cash. at We the key and have any we look think return But area. in we to committed surplus that message

Dennis Fong

those Thanks for questions.

Brad Corson

Operator?

Operator

on from going next we question Capital RBC Greg Markets. And your Okay. from have Pardy

Your line sir. open, is

Greg Pardy

we terms to consultation milestones most the perhaps with zero of as questions that net you’ve always Brad of timeline? the underway. what this there’s of and good have we mind out a But in for Thanks, rundown. since your guys been thorough period in should important sort looking here come be to June, guess thanks, you come should early over in how But for very grade one which of performance pathways And back the what’s Thanks. answered. I to my morning. part the Most tech.

Brad Corson

a and and of the is now, thanks undertaking a of on [indiscernible] the in will with need zero The Greg. entail. from for space to project will, right complex. focused all the – net and strengths along collaboration fiscal technical base we're and there define objectives, And some Yes, collectively, industry. investments all, And access are high on pipeline them, companies’ we're behalf very our support. And optimum, parallel priority a as also both first require us certainty there. pore governments going to our company question, five us in of of the defining we sequestration see you more it's if of huge, of the to provincial we solutions, Alliance for that lot support of to where very We're will the It's our leveraging what support around working and for also project in nature and hubs. federal the terms pathways

between the is the other into terms We of together. the tell with meeting basis of they teams cases and term, that's, week. I'll physical of this elements involves. that once myself all priority, end you are on working of I very we kind four focus think, defining in multiple of does a year, are a And CEOs, what meeting now where our own near a project. fit regular week. times the most our for have in are all and level that then up on of in that the the marrying the also So, support And

undertaking a So, this multi-decade huge in get we months. set is the important for that multi-year, right project, us. critically And it here it's very but a up early obviously

So are what we on. that's working

Greg Pardy

Understood.

Brad Corson

that helps. hope I

Greg Pardy

So, thanks very much.

Brad. much always, very yes, thanks As

Brad Corson

Okay. you. Thank

Operator

your the Goldman from you. line question from Thank comes Sachs. Mehta Neil next And of

sir. open is line Your

Neil Mehta

special this a brought a the flow is that up Thank might have the premature, cash be a it Brad, back at becomes you you'd and question the dividend, forward in generation year half recognize comment but think the curve real the around you. of given that which board possibility. I decision, I would

and it you about think you provided positive the codified some do do in seen think what done think opportunistically and a for construct the couple through we've different dividends. are special to it’s fixed cases the dividends, you a a in And risks potential special of some what idea? As variable have the then framework, ways employed have

I'd So, is relates weigh I you to here as relevant the concept. to anything for forum it just create in a thought that on

Brad Corson

I to to And faced the And chance with maybe value some Yes, about we thanks the you're to be question, the our going really what we we're going shareholders. between, And positive in and the for way there I comment a we're rest year, choices. look Board, we some and will is the give management of think, deliver reflect the right, team, those to the Neil. may be and position. pause on strong of very as with think particulars. continue to cash do Dan But through certainly talk on to a ourselves, best be,

Dan Lyons

dividend. we do equity variable reliable for shareholders preference religious a have obviously I is driven major analysts a Neil our what you even particular backs, think this of special is to. referred it's question. or you or Brad. philosophy thanks, there kind on any a Yes, from dividends And buy don't good what hear indeed we But really and growing

our the market and could shareholders other the you, with If have dividend of and and think of I pretty always growing our some that, as that that change. think what what variable or shareholders, we to can committed change reliable about want. we’re consistent but preferences going So, method to

so pursuing the decision this something backs, make we each is not buy with so, that be the and cons And more forward. – where its then share point. pros And it’s dividend Board at or we’ll special and as it’d we’re and dividends variable go has really

Neil Mehta

spending and half on what track the to Thanks, guys. half And in is, How back it? to you you’re bias second in number? level, think spend the full And downward is a us do guidance. for the year? then Is that your feel there still extent acceleration the remind year tracking the year the below full about of you first year clearly the again, well capital the of question causes

Brad Corson

achieve out I Investor saying, really And we And of summarize plans that focused a maintain this first, Day. it’s by $X.X be to those Yes, laid capital question. just at continue underpin confidence good the we we And would we guidance an year. billion can our that. on for

the You’re the probably of of exactly first billion. look right when you spent that only $X.X half at year, we’ve XX%

activity are several large but ramping projects. behind, tracking aggressively are we on we up So,

I when forget, quarter up. XX%, quarter, compared so, second you’ll And look to significant ramp a see you And XX% at first or something.

and our kind I own And or billion multiple with individual get and will projects that that project renewed $X.X that you if to give ability of trend, confidence our think timelines. so, extrapolate you a that, within to their portfolio

the heavily them towards of be And the more weighted just some happened year. of to half second

projects up on construction Kearl activities actively Pipeline, actively our up been Sarnia for at have where ramping and activities Products the We one our Upstream our of tailings Downstream project. that’s in the ramping largest with construction our we’re

And examples the the year of year. of expect of first significantly so half where the those to half are the to two we in second more spend capital relative

want so slightly record for of lower for continued to achieving what’s we achieving to all that. within and capital look do can we those discipline, the that efficiencies, of if do And timeline kind projects we is long the most through actually ultimate and we track optimizations, that, important a costs, objectives. have Now

end we’re more to that us spending little money going in the bit project look the continue maybe any not compromise objectives year, but will so, a little with result And by or to timelines. – of to bit a less And the that. for

to $X.X be close I going think billion. to So, pretty that we’re

Neil Mehta

Brad. Thanks, Okay.

Dave Hughes

pre-submitted. were have couple we Brad, more that a Okay.

to go to going right So, now. those I’m

Menno in approach this comes quantify of Is if TD. the so, Kearl unit first the interval downtime other turnaround to Hulshof the projects, and you costs, and The costs, et XXXX when? at beyond Can turnaround of the to one ones from a impacts apply extension which plan cetera? at

Brad Corson

that you those Syncrude, and question, Thanks in turnarounds major impact and in can collective had we And had Strathcona, Thanks. and of remarks, operations. the I extent, ways effective when work Kearl. had strategy and And safety, long-term do accomplish about on our turnarounds for think earnings. he work about that to highlighted the million out us. prize turnarounds. more that’s that necessary. huge We reliability lower all the figure that’s had costs. to extend that our underpins Dan’s Kearl, of it we we It three and was But Menno. intervals think underpins what Yes. was financial at And integrity, at we quarter, Well, this for a last $XXX this

typically turnarounds, to single of an million us million costs. And XX,XXX there’s $XX that last that turnaround and then few top to $XX costs margin loss typically associated our specific us day barrels. on average so Kearl, a historically annual turnaround on a the that, And will in at when look over around barrels with a years somewhere will impact those

so it’s announce So, plans. exciting one-year it’s those we why That’s a priority acceleration us. for focus to that can

of many, ongoing be impact, can say those an that assets, those And approaches financial years. for and reduce turnaround other so, plans the activities. How our We’ve we for been but timeline, reduce to would focus our optimized? at quite continues the working it for many all are I

prize opportunities, big But our going there’s to today. for Kearl of And most to applicability but on that’s longer why turnarounds announce so, other think exciting more continue we’re a the is that I so look there, to interval and don’t already. are much

Dave Hughes

comes Downstream, turnaround of Help Strathcona Suisse. Credit refinery. total downtime cost? lower? and the the How expense at it well, the the The was better much us next question what What is Gupta opportunity at the related Manav turnaround in but was from throughput impact was of understand the as

Brad Corson

turnaround. appreciate why And focus the thanks. again, there’s much on Yes, I so

particular XX% our for for capacity. same in days the our of have refinery XX duration. that it’s three us as at So you, again, representing about in turnaround largest XX, refining of was Strathcona Strathcona terms of That we

So then margin the costs was per around about quarter $XX financial And the and impacts. months an of of impact had nearly XX,XXX both terms day. barrels in million two of impact

us So, future. that behind we is important a pretty the but that accomplish impact to as significant work and quite to to now us, for again, one have look it us

Dave Hughes

Okay.

Capital. have do How Skolnick, corporate your We question Eight a assets with from Phil strategy? Montney fit the

Brad Corson

Well thanks for that question, Phil.

is our much assets. existing maximizing corporate strategy the on focused Our of value very

And thinking is us. not for so, priority current a major about growth in the Montney

our focus put down from costs, significant the purposely very drive demonstrated looking have to improving on our sand and We assets, generate that. debottlenecks oil we’ve to ability core value our further reliability, low-cost and

there you where portfolio, unconventional delivering of of are our we’ve that, us. given assets And to – that a if the we’re asset very value to lot continue elements we’re going in are fit performing so well, prioritize, continuing that to And those will plays. oil view, lot to of to say, the to list of unconventional a would lower got priority But core properties. on long-term a our acreage we opportunities. – advance relative we take in I they’re need some But sands our

those strategies for update see going our And on And continue keep space, we’re how oil reflect really now, is we’ll the so continue fits to that sands. to on it them, opportunity But to continue the priority market. to in current.

Dave Hughes

that JP pre-submitted of Okay. sustainability final from And at Phil question Gresh Morgan. that And around margins. was the chemical came have one we

how of about margin normalization? are the chemicals, you pace on So, thinking

Brad Corson

Well, it strong reiterate, was for chemicals. just very first, a quarter would I

few us, advantage it’s for the XXXX, of all, mentioned, and income all I highest a And of I have million favorably XX so all net to a very million million for $XX of compares also of years. strong quite that really underpinned $XXX first of an we quarter business. $XXX quite income net for And to being As mean, compares XXXX. favorably in by chemicals fundamentals. and

key things related then from our polyethylene customers us the products, readily on what Gulf with an the for impacts top costs, goods an So, economy our to COVID, and some recovering pressure our of to feed and access all winter of that, some advantages that, outages, side of on put top integration the facilities, proximity of supply got down we’ve in seeing then close position. south by we’ve the low to driven And got structural from on consumer that’s that. the refinery, market. put we’ve those increased though, available to and market demand is stocks is, a And Coast storms we’re as the advantage Sarnia seen

market And creating so a things environment. together those are strong all very

on our end, supply we new is and longer again, half second still we And going looked even be feel As of expect very the do some into be business. XXXX, end on the to with an think I we normalization it’s speculate are term, things a we I of very there’ll those of what look probably strong There year continue the and advantages us. the coming but difficult to year and pricing, approaching the to very term, look cyclical terms as But very business. will per to all be good market sources will have for this kind about those have impact. that’s dollar normalization are of we ton. of more seasonal where given of impacts longer some to going in and probably of I But some in think, like, nature

Brad Corson

I to you, back please? can turn Okay. Operator, it

Operator

Markets. Sure. from Dennis And follow-up Fong a CIBC we have from question World

open, is sir. line Your

Dennis Fong

questions. the taking projects. just for follow-up thanks One here. got Flue my is on Gas Boiler I’ve Hey, two

locations indicated of as, And to are the project. mind Rapids to the secondarily, portfolio the as bit update can and that it as So, installing to applying timeframe installation, well boiler look other providing at your any incremental five of technology you’re at can then you if throughout that. new Grand you’ve wouldn’t there look may particular potential respect rolled there’s where you at Thanks. one you What out a that on. with that

Brad Corson

Yes.

would but the Boiler will years Gas, into take complete to probably operations. our to one, Kearl on with process emissions to those. Because it downtime First additional of we two we positive three Flue ones But We we be the expect in it and very a that need on five We want phasing of the mentioned, pieces that advantages, as project, not we time cost of equipment are advantages. right. you’re in implementation. completed have also all I those to orderly only very

that pathway I look we would able recently, have barrels with Cold have between of our of to And – now then to activity XX% more that and Lake and we of say implementing it’s production. assets a a our field day. focus in shifted reduction the our So That’s great Cold were Lake. in Lake. will our further part intensity underway by XXXX. And some at driving greenhouse Cold increase a we to that in gas Rapids, forward terms Grand that volumes optimization existing lot you’re at And X,XXX optimizing to our at and those of drilling we reason seeing guidance

the like in some opportunities but keeping been near-term Rapids. volumes, priority our longer-term accelerate a to that’s very clear sight project on So we’re Grand line obviously of

a continuing our get base continued it’s that Cold are and in of we’re the equally we’re to is But very which project adding now. Lake, see that So, volumes, more important as give that near-term value. long-term to progress wholesome lot we’ve also the update. on But profitable going again, of made with doing Nabiye we’ll and Day, to project to right kind what add which a Investor pace when that And we portfolio. we

Dennis Fong

you. Thank

Operator

the showing to like at closing to turn this Thank any question further you. Mr. for Hughes back I’m no time. remarks. I conference would Dave

Dave Hughes

second of operator. behalf you, Thank guess very quarter today. much our management call. joining us team here, thank for Okay. you that earnings then I concludes the On

please further any to questions Relations continue don’t contact any or team. have you hesitate to discussions, Investor much. and want you Thank the out If reach very

Operator

gentlemen, that all and today’s you Ladies conference concludes Thank joining. you. call. for Thank

You may now disconnect.

Imperial Oil (IMO) 30 Jul 212021 Q2 Earnings call transcript