The company’s downstream business earned more than $2.3 billion in 2018, a best-ever result excluding 2016 which reflected significant gains from asset sales. During the year, multiple actions were taken to strengthen the business, including capturing margin benefits associated with western Canadian crude price discounts. Additionally, petroleum product sales were 504,000 barrels per day, the highest in nearly 30 years.
Imperial has taken a strategic approach to increase downstream earnings with continued efforts to process more price-advantaged crudes and to increase process unit utilization and overall reliability. Additionally, we have achieved petroleum product sales levels not seen in decades, and now lead the industry in retail volumes.
Imperial’s upstream business had a strong operational year. The company achieved gross oil-equivalent production of 383,000 barrels per day in 2018, up from 375,000 barrels per day in 2017. The focus on reliability led to record annual gross production at Kearl of 206,000 barrels per day (146,000 barrels Imperial’s share). Kearl production was notably strong in the second half of 2018 averaging 230,000 barrels per day (164,000 barrels Imperial’s share) up from 181,000 barrels per day in the first half. Imperial is currently investing to increase the annual average gross production at Kearl to 240,000 barrels per day in 2020.
The strong financial and operating results achieved in 2018 enabled the company to return more than $2.5 billion to shareholders through an increased share purchase program and our 24th consecutive year of dividend growth.
The business environment of the past several months, including the volatility in light and heavy crude prices, illustrates the dynamic nature of the oil and gas business. Recent actions by the Government of Alberta to intervene in the oil market have added further uncertainty and unpredictability into the business and investment climate. Looking ahead, Imperial’s high-quality assets, balanced portfolio and integrated business model uniquely position the company to compete and deliver long-term value to shareholders.
Chairman, president and chief executive officer