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IMO Imperial Oil

Participants
Dave Hughes Manager of Investor Relations
Rich Kruger Chairman, President and Chief Executive Officer
Daniel Lyons Chief Financial Officer
Theresa Redburn Senior Vice President, Commercial and Corporate Development
John Whelan Senior Vice President of Upstream
Dennis Fong Canaccord Genuity
Travis Wood National Bank of Canada
Greg Pardy RBC Capital Markets
Phil Skolnick Eight Capital
Call transcript
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Operator

Good day, ladies and gentleman. And welcome to the Imperial 2018 Midyear Update Conference Call. At this time, all participants are in a listen only mode. Later we will conduct a question-and-answer session and instructions will follow at that time [Operator Instructions]. I would now like to turn the conference over to Manager of Investor Relations, Dave Hughes. begin. may you Sir,

Dave Hughes

Thank call. joining everybody. this today midyear updates you morning us for on Good

we I in before Imperial Just start, management to introduce committee the you who are the today. would room like to

Rich and Upstream. Officer: Redburn, Development: I today Financial and will have Lyons, and guarantee actual Senior Whelan, noting information. President, forward-looking financial Theresa Any information of Kruger, contain future CEO: could may a start Senior performance, and We Daniel factors President and Vice results on Chief comments today's John operating assumptions. that Commercial depending the future of Vice is Corporate Chairman, and President by forward-looking materially, of not differ number

quarter factors assumptions issued further to the was EDGR described refer to are as and earlier would today, risk information and as SEDAR, on you Forward-looking documents most and and and these release imperialoil.ca, XX-K earnings I recent well available form that our are second our in detail them. on encourage

the conclusion Rich’s begin to going Q&A. we’re the As remarks, of

We’re a little and bit ordinary the analyst advance. something provide in a maybe the questions of opportunity we out the little to different, submit trying

We of lot questions submitted. have a

conclusion address more first of little between we’re So at back forth And bounce those and live go and the and a probably bit remarks, the Q&A. to some then going traditional move Rich’s two. the questions of to we’ll maybe

to it now So, I over Rich. ado, turn will without further

Rich Kruger

expect year. to the look commentary a we give over quarter clarity rest of second What give a morning. on Good objective color, addition, what forward of sense is of bit but is or my and you in the we a results you morning as intent bit more this to our

to well a the the that quarter we that access, the just shy as the about $XXX the but oil in You’ve of the is prices a differentials. $X seen for operating bit point oil a or bit that the up to share; behind our an from environment $XXX That in first $XX up of is some measured about only right prices, in significant year-on-year. of cash million, the operating If from generating talk quarter $XXX and half of first from quarter, first activities, last result. were about bit significant consensus, from increase the $X.X and operating results, the a year, I'll at about drivers If a generated factors why From half over $X.XX net the below in the million billion. second over cash step year. for the over activities is million on look that second I in the the then standpoint, quarter. back $XXX $X WCS earnings quarter. million billion represent -- I a is a Year-over-year, broadly up a went we’ve considerations we’re I growth heavies by Similarly, seen by about have by a year, first we've risen bitumen the barrel heavy it to the constraints realizations also We've higher barrel quarter course than seen WTI the over second the seen growth WTI. a and barrel $X about if year barrel, increases market those as where income $XX

to have market and performance. we’ve expiration the comments margins both we expenditures. make the year first something on there the I’ll the I'll $X.X million for comment spent billion of first of the side would run $X.X chemical and and downstream on business, in bottom and remained downstream line half in market the lines. strong strong the upstream, business the our cash a generated the conditions year, a throughout had capital operating both results $XXX each On conditions point half The and and of range. more rate chemical of of the on, In billion, Continuing couple full of year

However, in the the second half, first higher spend we expect than half.

year project. Earlier to the a $X.X at guidance we billion. to will low-end around in our end we $X.X continue However, execute that why think the to spend, billion bit guidance. second be on about earlier the of was we’ll billion higher refinery we drivers closer year, the something or the The lower think half, cogeneration end Strathcona the it on $X.X

Aspen find Kearl, talk our a We’re we step Kearl cash interconnect repurchases. a supplemental the share within each flow shareholders what attractive a balance I strategy project. bit comment maintain situ on measured program approval. if advancing oil continuing here reliable dividend; invest then growing at more crusher and Q&A; final and but allocation I to capital still And we as we are to is while of to sands basis invest will the in shortly. globally that from the to regulatory We a that broadly pace in opportunities, pay a our strong quarters; detailed release surplus will in about; in return buybacks. both timing and like on await ultimately, attractive I'll project, fair back On competitive, dividend more a and then and then we via do sheet; and seek growth

period. and on balance declared XX%, rate year in years million are the situ you share and and at year; where month XX XX ago And dividend, our in projects. increased consecutive XXX payments relative on over at capital ended debt those Attractive we projects, that per -- few a Aspen program $X.X believe globally plus ago days to sheet, Kearl potentially XX here upstream the the I’ve about lot If per currently a comfortable current that that barrels quarter in at are $X.XX supplemental of year-on-year years of maintenance specifically $X.X earlier month From here attractive a growth. midyear activity we a of talk month quite consecutive in June, at Strathcona share that each and strength. look commented spending of we’re day we’re and over in that in about have cogen competitive; our per we or of we’re lastly, a XXX,XXX a aware money quarter, with bought will aggregate; you're billion well where the Production, back by ratio we so in assets $XXX last we core activity. projects $X.XX in characterized debt-to-capital moment. I about that midyear; crusher allocation, production, billion a at the of

really both barrels half first a builder to with had expected where the at date, talk year of performance a be, lesser equivalent we’re barrels extent at bit is essentially XXX,XXX below where I'll and bit largely gross of oil we were Syncrude to end If you those. flat look at and the a due to first about half, This we about Cold little the is Lake, ago.

With of the volumes majority year to are half from complete outage ongoing, positioned second power of in the very year. be Syncrude for recent our maintenance we strong for and the its the what performance scheduled recovery we expect

we large were required on injection start and Going typical systems, water require our specifically flare turnout asset, included essentially fuel of I’ll XX maintenance steam, facilities. and work inspections and steam and of split sort. with May to days our We at facility; then for steam context, a five lake, regulatory periodic completed Colace. turnarounds this plants repairs, gas at Maskwa periodic cleaning Cold June; have the quite steam maintenance system and that separate between

major equipment time maintenance over have a strategies, us worked cycle turnarounds allowed six have improvements on interval. each very plant’s well extend year We And roughly these to practices. to

on year. average, about turnaround one So have we’ll a

barrels then odd, a plants. the without average year, on vary Now Cold size. the we’ll year plants second-largest in of Post on was it. those has Cold increased a day. the go about Maskwa to turnaround, sixth Lake’s Lake XXX,XXX And

to day leaving had the second production We two the plant. rest of quarter, the number XX barrels of plants. with expect inspections XXX,XXX turnaround expect course enhancements we’ll approaching are the a a barrel this we and Kearl, gross first to share the In we equipment. end bit at continued maintenance averaged it’s be quarter year, be followed quarter, second in included day on that gross second shorter, vessel reliability or is the going ramp-up by at more and of this a the one Throughout that And XX These XXX,XXX prep days. XXX,XXX us at a continued facilities’ the barrels of at year. XX of one our both and/or have to day a We XXX,XXX a year numbers gross. XX%. piping day turnaround in think

and scheduled to the finalizing into now. We’re That’s October. start then mid-September overlap details in right

half. second Let’s talk about the

the gives at first equipment knew second that two crushing these expect for for directing had XXX to and AM had of We’ve to the of day at construction that XXX,XXX days flexibility weeks with XX year. seeing four rate for several day the X XXX,XXX further June's or the last the had AM the first quarter gross. the at utilization. this that morning day X.X start essentially we reliability confidence of the we ever performance highest would the start now first supplemental months days day give performance third the which at of was barrels were a barrels week downstream the seven at lower interconnections Longer-term, our of plan, averaging barrels barrels at highest essentially reliability this maintenance, us as for as barrels fluid facilities a each These Kearl addition, two about be the a we've in than had evers the half plants in year -- average in the weeks, XXX,XXX ever we’ve XXX,XXX of the half annual and morning as the each. at seven have, XXX,XXX taken We’ve the But since have best year. performance this the highest day. from a ongoing, will each half. up. enhancements, we’re expectations, X of maximize flow achieved the to highest continue We’ve of a our full the it’s at day. we We our ever a capacity us since at And XXX,XXX of And daily well we've days both June Kearl. The flows in alone day barrels as above in and through were

is plans timing from average with any objective of next an this Kearl. of the achieve day in when production by annual projects are XXXX. we’ll Our cost, on The XXX,XXX our that unchanged year commitments our and earlier starting are that complete these end a work barrels of conversations

In day. of a Going we to barrels averaged the from share bit quarter, up disappointing Syncrude, and it last quarter disappointing. our this was the year XX,XXX of a was quarter

was with deviation the impact versus day a barrels in share the activities. turnaround Although, biggest planned versus quarter the -- capacity our XX,XXX associated expectation

Specifically, quarter. in the occurred on first Coker XX -- June event turnaround the they quarter the XXth. power that wrapped end and a up the was at started day the X-X, fully outage quarter on during occurred essentially in the second But other major

to Specifically, systems complete failed and select the It units. is damage Imperial, then Suncor support with a high-voltage Suncor investigation steam Mobil some shutdown Exxon and transformer to of hard in facility, A failed, resulted full ongoing. a backup by also caused systems fouled processing respond.

the of impact quarter. maintenance magnitude to equates impact gasoline the schedule earnings so the unit you it its a of And XX the once of an based from the this volume and and derived FCC. continue lighter this, taking included is impact thumb, at broadly, XX we or Coker improve from X-X share competitiveness optimizing refinery's in years gasoline per XXX,XXX feedstock the It's largest quarter about million earnings More the history. major be every a downstream the averaged and $XXX downstream bp of throughput so, the before quarter or or fortunately, capacity. reference, the unit. refinery through production of a roughly the full talk we overall of FCC heavy FCC primarily a a is year. was to the long engine only Very September the procedures, about event, maintenance is the and news the This our Coker and converts of in was or day, facility. barrels advantage discounted $XXX moneymaking were The a we refiner. is day the day the distillate as for be following goes that time the restart our fluid roughly margin heavier Strathcona cat quarter such in about in resumed turnaround four barrels And will over cracker by about the our completed was first now we the this achieved refining work originally a event products. last a heavy for will In molecules to million. XX. quarter in and event in next XX% X-X, from XX% That's incremental overall sometime this activity have rough $X.XX Consequently, year. rule as XXX,XXX and machine gasoline We into fundamentally crudes. about for relative FCC the OPEC crude were such Strathcona's an again. years biggest Statistics feedstock XX,XXX through crude is a anticipate roughly XX,XXX, decoking average of The in day light the on on refinery going last of on second planned up the rates barrel

of Quickly of quarterly sold us first increasing largely XX of what XXXX, feedstocks XX% product the Marcellus quarter $XX performance the half. achieved third-party plants of of acquisition. through chemical Mobil the crudes feedstocks, and of are building petroleum we under our performance, However, securing our refinery cost supporting approaching more entire our the high way superior are up by the our than of Texaco earnings; ago. us; our sustainable half; Canada sales, in a sites. through from that third this through of in branded leads asphalt the nearly advance profitability out and material turnaround half product able the our achieved The average at in sites our include as to our we you immediately this And utilization fuel business. Mobil if matched grown downstream leveraging a best we million heavy sales, largely despite quarterly first the ‘XX, fundamentals ethane time grow Since Fundamentally, to that, shared the a of product has and you fact, On the network Esso quarter, the ever polyethylene first fuel and announced side aviation the were heavy period. for increased sites our this sales, had mix. feedstocks, a chemicals business, overall and the chemicals was result, reliably Sarnia performance. Esso year and barrels both crudes on Sarnia quarterly a our our XX% this second the we after barrel sales earnings the four previous pre-turnaround of achieved Canada, We’ve full that XXX we've to to we our are $XXX now that our day through day strengthen back result if strategic our overall three supply our profitably by to the own at customers We above driven statement brand XXX longer-term by X,XXX a Earlier sales record chemical Nanticoke, earnings of in matched quarter we about is nationwide, or a introduction our inventories and of brands, brand off-gas to Strathcona branded at count of first in the XX% Actions overall product year, and business; our throughout XXX,XXX Loblaws our every conversion purchases nationwide. overall million; but retail and in chemical for step branded barrels the via existing continuing the we sell partnerships added offerings. value the exceeded advantage in of our coker network, Strathcona million strategy and last refinery branded X,XXX are sales. it's Mobil raw in of XXXX; as provide like derive XXX,XXX half we year, $XX sold

up, So heavy quarter to can safely successfully characterized before and And performance. your process of upstream by be wrap to both schedule get us reliably half planned questions, With a a year I second and the we be addressing just downstream, for in kicked operate for over work expect time. your our the Dave what go going to this the that, the maintenance am uniquely to completed positioned in facilities and with questions. it second to off we’re will in we back turn Dave, the strong

Dave Hughes

Okay.

So outset, trying have technology. of differently by a the at new questions number that something as I a were we’re do the mentioned pre-submitted We with little analysts. the

through go two as a and through. come probably move Q&A, then and pre-submitted of back questions now then move to we going to the We’re over or some live right to three

the question First Energy. from So from comes first Mike GMP Dunn

our Regarding approval? you you do environment on X% you fully color up spin, any Aspen you NCIB? utilize the regulatory more current what's would price your can tomorrow, holding current If holds, think receive provide approval the if

Rich Kruger

as a competitive. globally WTI just And a $XX first billion capital XXXX. two application in be investments we’ve We economic for solvent bitumen result SAGD, XX% would XX% SAGD that the believe will in efficiency to improvement to we updated XX% along phases December would that regulatory And it and barrels criteria. and industry And anticipate a would said gas versus $X.X environmental greenhouse investment. billion we technology we’ve all assisted not our so meet of benefits. approval in our it day in amended it in Aspen, that improvement be return that about define We in XXXX, this project, XX,XXX reductions to about per are delivering project SA-SAGD. familiar, submitted submitted back and need of $X.X of phase October barrel of Aspen for or on We the world that initially with

have We rounds of responded questioning. to supplemental three

Our environmental in X.X the that engaged and project of delays were has energy groups decision in April XXXX. years this we’re the the public concern all the on further have impact ultimately, with in extensively Alberta And regulator that for assessment what indigenous interest. tell of of is timeline And on was adequacy from and deemed There stakeholders project statements the by complete I'm the regards. determining AER decision we in consultation the closure disappointed is on occurred. quite any now waiting regarding will of I best the its this. you, in

this both uncertainty an attractive think striving the we long disappointing. as I is we And project, be pursue timelines industry, inordinately should environmentally. province are a asap, extremely project and should, of and it as should quite that economically to type be

if decision. here it expanded if Now that approval, we relates impact said, we as recently, And our conditions come a we then. investment what and get look the when Aspen it to NCIB in we NCIB, screen see any program will to the clearly make on final view any with had

have the a is, my Aspen, the continued at like program pursue an here capital near that that thought or have will both as applied allocation strategy our well back capacity pursue as just level for. we the we NCIB So on to comments

Dave Hughes

help Bouchard at your examples right Dejardins. specific any share confidence that that is from details, us came next can there Syncrude on question can the understand Justin path? Are The you

Rich Kruger

an reliability. as but about that of and services doing And has with we look in is issue asset with hear the support we it. Exxon at generate we yet had management the look are that had to now Syncrude’s potential and If another venture event. cash, that we steps expanded it agreement under yet overtime and Mobil have outage, the we Imperial again, question And the the tremendous power both no with is back been has ownership Suncor it’s the performance disappointing. There as

enhance right the procedures, back on. step we're things, things table, occur. we look of eliminate that on believe operator and the the training we and doing to maintenance on this one-offs owner facility equipment ultimate to We the all to reliability strategies, remain continue need at the As so-called

disappoint continue there commitments It’s confidence be make are And performance, in then that would and with -- on overall the overtime. continually we think promises of and will So on steps the the order to lead is target, achieve the share the taking path. the to the to something which them, but on XX,XXX the we right high. we belief Syncrude that are on in something and to of the XX,XXX barrels frustration difficult ultimate remains that at do is we clarity day reliability, a our we objective that XX%

Dave Hughes

Next recovery is Rowland impacting technology How question Edward volumes? Lake’s from based Cold new at Jennifer Jones. the solvent

Rich Kruger

steam. it solvent X%, a or application -- identified to bit use Specifically, and project the and expanding, Cold operation, we it we’ve in laser. patchwork, steam been put. part operation. enhance expanding a It’s of the call high-pressure steam put field Cold has to under in It’s used have cyclic addition right of a continue a mixture, new we’re recovery. X% based that But process to we test of And actual a pilot always a solvent Lake large Lake steam, The as technologies. now liquid the a that X%, is to technologies, cyclic has steam we’re

area. last You and steam some we and use a -- in completed starting injected up. We’ve did casing the in it you of plan. delays work, We some like was you communicated then some that We it soak year, turn and you had integrity it other steam let back. the this of cyclic our had produce strategy it part around

looking laser year economic see half the remains as the in confidence as to as that and year and behind, at somewhere bit the ramp-up about where in day current a be, a of rate, will X,XXX production we’ll and that in steam we’re anticipate from the The would Lake to on thought late other we it operation recovery. transform continues the pure of implemented timing. expanding second its to that's X,XXX confidence that at behind the a that it is at it is and the as are enhanced the the barrels a half we So that of and have last of in probably growth application continue order in technology a technology we further now ’XX high, And second we ’XX. Cold performance, field see of on cyclic we kicks into forms part

Okay. turn questions. Operator, think the next over to of going I we’re the phone line couple now for

Operator

Thank comes you Canaccord Dennis [Operator Instructions]. And our from from Genuity. Fong first question

line Your is open. now

Dennis Fong

question that Kearl. the have So just around first is I

really So are of as I you appreciate currently and to the that conditions now. operating color level at some right guys the

the curiosity Kearl, you operation? employing of XX may terms from an out a the a you indicating, you’re capacity of complete six of just able call of think like that such a secondarily, consistency at And of stronger What it’s being production? of extended further period of additional think about much confidence that you interim, how terms the some being you -- think of guys to have it, -- versus are be time. high months day redundancies the guys a operate with situation to more achieve then terms at you in in consistent achieve rate to XXX,XXX form barrel able next or for I level after I in level

Rich Kruger

of each have instead the will at capacity feed. them and it crushers in XXX,XXX crushers barrel of for one When crushing operational of two supplemental the of time, end them, essentially a interconnect, flow of any one in the of of at come half day flexibility or back that or give can question ore us back. start I point a If provide we that lot

So it a would work any high. the meantime, have to that quite one of bit have downtime confidence any I crushers, on vulnerability be the two. would reliability, is the takes In completed, when two that of we the we with what the and still say,

to -- life, we’ve ongoing took of the the year regular strength the number and maintenance, we change the do, we last a bearing load done life. crushers, to So on steps lessen inspections enhance

of the year. barrels open more our think until have a a That place. progress. material certainly achieving there’s bump the can have we’ll XXX,XXX and than said to that there crusher current up into awareness reliability. that eyes have about level, number vulnerability in have we’ve on a So will made to think -- has expectation we’ve But to supplemental day testing that. we work that the we been gross a bump wide things in bit be of then no see difference any And a it next do or XXX year XXX, the magic But up the this is conversation when once beyond be At place, completed is that continue factored in to personal we will better question that. we work I that day

Dennis Fong

ramping out rail. around, secondarily we’ll on Western looking guys potential managing how egress about, little your and a hoping are it, it some in are of up just and more out tightness exposure peers seems of to I degree current then like you a And find number egress to your potentially production to Canada? call was bit at

Rich Kruger

seek back we pocket, our refineries XXX,XXX a about -- That’s to within about roughly heavy of we to XX% And I -- into significantly bit on crude increase And left priority heavy we first into foremost, how or take right there’s our much pocket talked and own you our natural to barrels refineries. If and strategy, the put step of we a bit as the hedge day fundamentally heavy deal seek can. as oil a I made feeds that. refining, comments one.

barrels be to in barrels to would oil can. which the in a of contract And to markets, via the like same any hope as possibly back we places said the insurance venture rail to many build Rouge, things, i. about value It’s -- the to world. it policy market rail access, our to feedstock immediate market. Priority Belmont, priority an three use the facilities terminal, as Louisiana, reliability be heavy value get in be use it the pipe Strathcona joint fundamentally Coast. decided get capacity Coast our At strive Gulf thing, highest Louisiana that’s e. market Venezuela achieve time, the bit with the We the refinery. commitments we that largest concentration XX-XX to would our come a Secondly, timeframe. intent Texas, the continues in offers Baton declines highest if new It’s processing didn’t Morgan like and from to too policy, didn't then have a that pipelines value, XXXX two. was so much. highest insurance We that the to we to adjacent Kinder to Texas, with Gulf of

While volumes not Coast in differential Texas, facility this ahead to which to a our our highest get if exposed large doesn’t things the through the of will of bulk XX,XXX the We’ve capacity get time, primarily discount. XXX,XXX increased were again, in And go would system, of and facility. capacity barrel Louisiana, refineries the debt the compete places Last and day the pipe to again, Gulf own And be have will like trains that year, on used XX,XXX alternatives refineries, look to capacity. pipe of to I in Earlier now. barrels something volumes cost-effectively to allowing a second year about the it, to a to the we’ll -- mainline into the And it that area. are it’s the it. targeting production. day over using or basis existing we I half of barrels a us barrels be of to unit a our to least, into day markets the widening -- of more using XXX,XXX go this the in of -- U.S. that realization at we net XXX,XXX ramped to that largely Joliet the closer day it. capacity it that here day our roughly in ownership Midwest, its like XX,XXX in for with barrels go XX,XXX but a expect and use up go We’ve mostly and

own exposure Coast continued overall expanded So we use rail. our pipe to of refineries, reduce continue to through Gulf the to contract differentials to our and

Operator

comes Wood question Our from next Travis Bank Canada. National from of

is line now open. Your

Travis Wood

you plans and this morning, having, us on conversation? long-term of success vehicles just barrel through rolling savings, early that at on here. through you more least, could that what a Could absolute autonomous cost the mid, an the even in per haul then You on you're And around mean the touched on on higher-level or that efficiency larger scale? release are out touched in a you walk thinking cost guys how both short,

Rich Kruger

lowest in I maintain I think reliable our that. competitors or about of the all it’s if step operations in Kearl enhance no cost and achieving all And good our back into times different long-term dive for supply was question, before the of than bad. to

other with it’s our side, opportunities of to performance. the improve is the it, But scale the continue think significant trucks do business we in do et offers controls looking the what mining crushing the existing in key at to-date retrofitted capacity, about On are potential. then We autonomous to for economy in cetera. have service hence supplemental we’ve and pilot pilot. that current that release trucks are autonomous example, we commented the sensors These and the And the our of are operation. expansion the that equipment, for required that

Very and continue that autonomous, more here more up this be and to worked a where very trucks by fleet. performance can it as this threat jobs. to a closely ultimate pilot, we seven key direct driver the ramping trucks end how to we’ll threat, ensure a of view are the have workforce see year, to our So how their to people have this how to -- you don’t is the movements their to relative just you

so success. are that and And ultimate helping they support this, embracing there’s

a our can necessarily productivity fleet would of we on up terms might what with include we in might think drivers $X.XX, barrel. cost of are. Now fewer autonomous the provide? incremental just If improvements, something That which math save grow believe the do and autonomous, about doesn't make as the truck in them money in it up value trucks, future, straight the come there you kind to you $X.XX having

reason don’t it I there can but -- range. don’t yet the be So of absolute not question number expectations, we it saw the why asked range. any a on see $X I in something and was could have on that a be type barrel

see continuing in economic the a so I operation And an autonomous be form that But operation. enhancement to the and optimistic pilot, have it we’ll goes. this we are where expand will to would say, of confidence level a future of

Travis Wood

it's What vehicles improvements on there value business, where where disruptions could else supply see technology the look the through of continue extension are thinking an just technologies see, lower. and the can integrated something step on or function about other along types side If down then whether this. today, out? some to autonomous be some the chain or we we you’re capital, that as sustaining any or overhead trying we to And

Rich Kruger

anyone on of million type do of bad the commitment it our to fundamental pays and and to and would year can --. of You're a over times well assets long up good this, technology hold in aware, about nature long-term. science, terms that life $XXX because the and innovation, the in We assets. we to $XXX out our million that spent We of

technologies, Lake most its Lake, largely a uplift for of applying over am recovery. I excited you now, Cold resource areas talked is because Cold about the we That's bit operational solvent-based little of think the continued amount our life a been material recovery and given get I over steam, story innovations, incremental years enhanced about production new an can XX commercial time. technology,

gas give greenhouse it function And and emissions do aspirations will the that of I with solvent-based will improvement. a of a technologies bit step lower consistent performance. societal think

think the I So that key.

about And Kearl, at think like things talked optimization size haven't there now can overall yet, small a places steamflood aspect scoping with at optimization is process and digital operation Cold we Kearl of and of the potential area, wells again the complexity We at are of the in Lake. things. hundred X,XXX Lake to Another lot we Cold at differences. make big that dollars million this several are

And as well. -- digital same right things the so the the can the think upstream now. I enhancements in focused -- downstream I’m lot on I'm of a really apply But

those call function. step breakthrough You

aggressively I our pursuing to think material big those and of are impacts things. can largely types they have big, competitors we

Operator

from question Greg next Markets. Pardy our comes from Capital And RBC

open. Your line is now

Greg Pardy

just where numbers give running Kearl. a is quick a go up? couple as you want your And of at sense to first the volumes one just to which as precise Rich, OpEx it to where question, for the expect really on you, go is do maybe, year the you get ramp to trying through you not may and

Rich Kruger

same. Greg, remains the I think our on earlier conversations guidance Kearl and

we’re on in and first cost, at barrel -- as of you fraction the the of XXX. the but the a U.S. XX% itself. dollar comes the is turnaround major a The of performance volume the year, we the talked that money turnaround And of I of XX% because the have so barrel. incremental full mining fair to the operation cost before, at basis, or mid-XXs spent bit half And of the

and in below the that that the the when the of second volumes And or to the a half at as we that we see ’XX get we drop in So we will on as to year, That’s then end to XXX. particular crushers $XX down. supplemental comes cost. ’XX barrel into increase expect the of start

But haul at your natural are for the have you nature offsets other where autonomous truck pursuing out, than any or might always of increase aimed opportunities that’s we’re as at, You distances distances, have offsetting and more competing needs the just and we by things operation. truck the increase. like mine further

and of anything years unit if have guidance things, further been we other I had on more would I drive fundamentally probably talking with remain year So I conversations costs think some think, to cost a about anything unchanged. these really now than There's we’ve see Greg, two or opportunities Kearl down and not -- digital might and ago.

Greg Pardy

been there on talk know not about at terms perhaps has the plan. school in Suncor’s I questions speaking would I Syncrude. necessity, amongst game think, of for is the I when on asked your better? it out I just some the be mean Syncrude? am And But they here that call same yesterday, in more did around page say accelerating of Or where cohesion owners a owners view, is fewer actually everybody situation reliability I

Rich Kruger

corporate lot say on asset fewer fits organization laser value yesterday we would operating there in during on that. and few anything economies further cetera. number structure IT, a are clearly any the and of didn’t call. making quite I the can is enhance focus of in like to of a hear the more et few and procurement, questions was interest a their With we all recent that years, there, owners What on we Syncrude Syncrude dismantling or I about that scale of own, whether services, and on support a more of past synergies that's it through add

And the high IT, procurement, looking Exxon XXX people and working Suncor, services. adjacent at management, operations, For they’re to standpoint, seconded that there technical, assigned with recent example, because of have operating are Mobil priorities. financial right warehousing, this and In we now, and lowers every are a from efficiencies the overall been Imperial on logistics each months/years cost Syncrude. Syncrude day and

constructed commercial about with achieved enhance that Syncrude doesn’t we working sides need arrangements, be ownership. are at behind for they on it and XXX% are Syncrude, And we believe make no can there value on things we’re there that. fence of say at reason. that there’s are on and that arrangements the the And where can here Now commercial commercial think if both Well, and can are and back help be in started, all the change I like I to sense can parties deal. looking hasn’t that enhancements to at go it all

Operator

Energy. comes GMP you. Thank Mike next And from First from Dunn our question

open. is Your line

Mike Dunn

Strathcona feedstocks obviously, the frame benchmark wanted synthetic your to mean, that's Syncrude unexpected there. a let’s years if could say, Strathcona of Syncrude you over last Horizon, you numbers if you given maybe Syncrude, the I profitability in there’s Rich, much downstream us I maybe Suncor, provide to unplanned impacts part crude a profitability But if big Strathcona around outages about price synthetic or just running or for probably how unexpected profitability? And your refinery how Syncrude. of, your some -- spikes Can light several how wondering that you relative that, the of have example. interlinking downtime impacted or at for to that see XX%. ask could frame would for we was at at your the is

Rich Kruger

It’s be so, needs. correct you’re Valley is at XX,XXX And Strathcona. it’s a connecting barrels feedstock up in of third can at and do barrels to go Mike, of the a And it running Strathcona. a or those refineries’ in roughly that all of feedstock. right day essentially what our Syncrude terms to importance the when that Strathcona share, up

it’s So when Syncrude has -- unexpected unplanned important an upsets, has it on Strathcona. impact

the scramble Syncrude able more things Now, And to and that than ahead when of the scramble. when time, supply event, had Strathcona they for doing. more But Similar last liked. events, folks than we’re unfortunately, get would few work have has things. they we’re planned years, unplanned -- supplies we to to over do they’ve need have alternate

they’d We synthetics crudes, other at alternate whether be or and light. testing looking are

ability because have impact events loss swing, over can is of do math vulnerability, to is I the and makes upstream bit the The of then it it Strathcona a you and dollars to can keep in looking reliability numbers necessarily supply, benefit it, the day a remainder find as that very maybe but it of direct lessen -- takes there crudes we And basis. have be we that the a to Strathcona. not their upset of synthetics we reliance does the alone a quarter synthetic high refinery at and every what without the do a from Strathcona when on directs to facility. Syncrude not Syncrude other the don’t than millions absolute sense a we maybe level Syncrude disruptions. performing on to the the Syncrude We’re a of are should plan at of it But of a agreements little share. alternate every on day-to-day highest that or barrel course it’s it. Syncrude the a affect But supply Syncrude as can part run On impact looking troubling the on at Strathcona, to it of at standpoint, does bigger. only use numbers The explicit the exposure it more likes on secure with because gigantic.

Dave Hughes

go the Rich, some we’re of going now. more to to pre-submitted questions

So upstream interested the see going versus in balanced the more projected and I've Do set? dominate Credit of relative attractiveness I'm the the got of you one here investment from opportunity investment Jason forward? Or Suisse. Frew downstream current does environment. in still upstream

Rich Kruger

-- with relationships, five some generally strong network, the view to think Aspen continue to where Greater efforts is say about bites, that's downstream And things have, drilling Lake our look do you so, last years about the the there. service what incremental our maybe and there programmatic I performance I performer It’s upstream, balance projects, we upstream this. and it’s to the terminals, Whereas branded rail. the we of it. course that's the want have area, financial this The whether over less it further you’ve at competitive have expand or an we Jason to be things whether that at tends or strengthen of to talk to I’ve an integration in aviation work either that when at strategic value. it’s the or we partnerships long-term position would providers, seen tend our is big enhance downstream, we and like the downstream. strengthen. talked see cash Toronto logistics we greatest Strathcona, like the investments, generated smaller cogen Cold of In

warmer and out haven’t Vancouver and how an been run the sales now on facilities aviation the even We in into our use supplying we we have months. recently to year-around fuel winter do. are standpoint, asphalt airport weather that figured asphalt in We, for store to able

-- compete our some at it’s to we you new example, a the the that’s and doing we’re upstream like see likely they There need around look in it strengthen market. absolute growth year-out So are there declining and downstream relatively way. old an our to not for demand certainly basis, don't saying if year-in the that product some flat something many performance, But looking this cash is. to downstream. On may are surplus assets. ask opportunities we And are I money opportunities like refinery didn’t in less dollar in gen said, certainly at are petroleum make of North you downstream. America, our or that increasingly, of capacities pursuing And relatively But you with money. areas. with the -- you big where to spend

further add So wouldn’t strengthen an on in we it really investment or be have. what necessary that to investments but

in exception could advanced that one looking the -- or at our at Sarnia facility, chemicals can business, both opportunities we look as feedstocks. as to we’re of the So be continue west cost price advantage well take

highest earlier or attractiveness. bit the be We’re relative been not But that’s at value say where over we upstream whatever the it’s time have area talk they it’s downstream about the more do other, as opportunities the one an that. versus look in I would in in. business to overall think may line and environment we we that we business happen

Dave Hughes

levers How in your you Wong, provided plan update pull the the if an from Can to outlook question us update year five main business your a have you there’re Stanley. CapEx give where since and in November. We changes? Benny evolved is Morgan on

Rich Kruger

think, I right I I’m this announcing it announced we now. haven’t year, guess Benny,

October, have early late going in Investor an Day November. We’re or to

last We We’ll quite updates capital We’re moderate outlook. in We’ve some We’ve some plan Strathcona. November, comprehensive had sit that in pretty Aspen think relative talked parts opportunities give in landing are today similar. the go on and But the these. I about talked I that Kreal. still including growth component the if date right about there, through to all now. outlined here we on

now. it but do we’ve our think, I talked will as notionally, every year through similar we about, right going So be process to what we’re planning

and we’ll the see year. we later uses of this We them investment community will both and of dust funds out as off, in sources all here there that update front put and

Dave Hughes

committed And space? barrels Pickering question affected on move Tudor the of ability from Holt. How’s mainline Matt Murphy, to portion out most pipeline our

Rich Kruger

earlier I think getting to we gets look own the refineries because because run commitments we heavier had using the pipe the In back impact. when day nature, at and pipe nomination refineries, the quarter, that system second access our capacity it production contract some the our tight. I priorities, market of in to crudes in and a nature confidence really in to the we the of can the provide works both have pipe, and system It refineries’ balanced integrated the with of our haven’t. integrated is to our way the that it. we comments get of advantage of or and purchasers mainline But talked quarter, lot We And think a some to first volumes the mainline. In the rail. market Gulf I limitations on Coast we had we barrels the on about move access. XX,XXX

it’s so better ground the I when are in will And sleep and pipes there access. tight, expanded market new

to feedstocks to our the And coinsurance so ensure and on and challenge cost for keeps folks have advantaged refineries. we a production their our that ensure it’s we most folks month-to-month production our equity to supply our get toes

Dave Hughes

questions of again. go We’re going to to couple the on phone

Operator

Thank you.

We have from Goldman Neil Mehta a Sachs. from question

is now open. line Your

Unidentified Analyst

was seeing I it behalf IMO position help Are better? there in the XXXX Company could is in an positioned of Neil. This Imperial Emily any projects taking world. that that out just on how was interested is

Rich Kruger

WCS of industry a a the differentiated and continued We of take up understand linked out think gives crude our the starting and -- at threatened level crudes concerned advantage from sought came level access were the look offers. heavy be. discussion about it, it. us and standpoint, there’s marine a threat I first lot of what standpoint, to back, the Emily, with, think, we’re overtime we a to fuel from compliance first do what bit will opportunities, high-value as let’s but compliance have planning all, or conversion and while of feel when we���ve that less topic capacity by ability might the equation, a complies. the mean, we this to debate okay, this analyze create We about and But of

sales, of are IMO our benefit sales If world. about you less barrels our will a distillates, at we in think look had We which distillate than heavy day X%. a numbers XXX,XXX post XXXX round

say on have that topic So we’re terms on I would a how deal gives working these things that impact Company. us in in at, of a But can looking not the of we are we’re it operate it's may world. what anxiety great that

more Now, to broadly if prices. you do about crude talked what might heavy it

will to crudes. there’ll our all heavy And priority. crudes demand be crudes Here that from massive an the refinery again, for and got network a works continue strong remain we Gulf we’ve hedge. that now you’ve get value the has in those heavy us expect to a that -- times got mentioned of the maximize that bit couple give of will Texas, that Coast, and our be offset a to And a Louisiana, complex and facilities I’ve that to ability there, high and a

Unidentified Analyst

a quarter. got segment. well for I’ve Imperial chemical second And really on performed this question, just the Chemicals

the particularly to on crushers Just guys seeing wondering you’re respect margins, with online as in what comment come you can Gulf Coast?

Rich Kruger

a there’s think things. of couple I

a the feedstock ethane; gas. steps over Sarnia years, to of the reduce number last have, we’ve mentioned I Marcellus taken We course, all our two costs; to of continue off

and make in And quite money we our low. our bulk rotation where keeps of polyethylene, is the that costs molding. the injection So the particularly

got a number. polyethylene; you forget at we've so our and a the customers. to then of stock drive I advantage customers start location within the looking majority a are day's feed -- I exact advantage for think when our But relative cost our

may those other not you get strive logistical those have into to have and markets. markets, a at look in to have greater but that may situation as So would the they may scale feedstock cost they they or facilities compete

over increased capacity; here, any last not way; years; the So a a fit competition to new size an us take weather things its couple to come from. niche scale of we mean able I but it profitable strong, X% it put a but X% keep it all shape our in wherever and cost business, incremental not don't we’re operation; may in a do to us crude effective as or that to in is more is gave strategy gave it furnace continue that it to minimize massive the it’s what

Operator

Our next question comes Eight from from Phil Capital. Skolnick

Your line open. is now

Phil Skolnick

you pipe because relative competitiveness the facility Can us coast. the to have economics? need had you You how pipe in down help individual the railcars you U.S. Gulf competitive that the is that, just the to to pieces, all mentioned quantify it

Rich Kruger

you written numbers. of so if been Phil, And lot's a give numbers we some I’ll to these and you generally, and on the -- a are I'll but And But ours. moving also contract there, these Alberta barrel see barrel or Gulf plus round or there the you from minus talk can in $X Coast on if out it, reference look at industry a thereabouts. pipe but are

than $XX couple rail higher a dollars something cost rail barrel, On on or of that, is barrel. variable $X a the a perhaps our terminal,

fixed the which it got earnings is in cost, we’ve course in fixed for us terminal a things. We Of at investment the certainly you’ll barrel the -- the see $XX from full the and look range. or

XX XX talking -- industry about that’s full seen whether unit or You’ve to costs a rail. train manifest

optimization then cost. because But that week-to-week, the that And lower a cost. comes variable on look bit yes, month-of-month, We’re the literally can that, it of when to facility. than we ownership at full the time come optimize

to in are price I continue foreseeable is the Hardisty. to rail sale And will providing, pipe, get head -- for And with a highest with so we via value head of than looking of pipe the where continuing our that that earlier market do contract value. in as said or highest we volumes traders Edmonton of at the head netback think future, increase the a and provide higher Edmonton,

Phil Skolnick

XXX,XXX just the And are to And new third-party XXX,XXX, or the the of second maybe own just in full rail to would half then that rail half? all own on volumes? going XXX,XXX your you get look side, to in to mentioned a be your you’re so follow get XXX,XXX. is of also confidence the gives at do what to on to party, Is that volumes? you going you And third -- you going continue more to up internal second

Rich Kruger

of, our I continue we terminal the the on overall service on in foreseeable think, owned from getting utilization standpoint, is that on again view for XX% the our our largely rail up people of own will and the and meet rate -- our and disposition locomotives future as it. determinant optimize the capacity our been we needs to power, of the has crude. trained necessary increase ramp providers, The

barrel XX,XXX year the and early the XX,XXX, the growing slower more would growth we to or hoped bit course the something the of working. a XX,XXX, we that utilization it’s of the over from to than probably this commented arrangements -- year. but then into late XX,XXX, at in the and have day of So where supports entered XXX,XXX keep course We’ve that a that's the that year, over I've XXX,XXXish range

it a think expand if will access by needs. And its as for is look we’ll take but third-party make utilization, advantage attractive our just others. to our I money either at to ability terminal own service So to not market needs providing and needs to meet it mechanism, that of or continue our

Dave Hughes

So I the think that end. to brings us

it to Rich, any for turn remarks. So summary you I

Rich Kruger

of I’d this and your do feel of better today. a Dave thank to to allow ahead questions technology all, hope where folks’ only second have and of your of results clarity, for results, our do questions the as you But time transparency and I rest of like Investor for continues fledged our quarter release. full will year. provide going And performance outlook be our Day also look the this on to we we and the have third a our you but appreciate some First not I see mentioned, can the to at do your commitment forward. greater time, time use we of around we are. our will how you I quarter interests so explanation,

as engagement look it on. I We’re your continued now locking forward down year goes but the to

for attention value. and you and this found today So of hope time thank your I you

Dave Hughes

us my didn't just to effort to wide try of I pre-submitted an everybody I make the we get a joining range we Okay, repeat for this thanks cover questions, all recognize did to like of to topics. morning. but

reach to have to please always, as you don't So or if myself any further questions. hesitate Jeff out

on think the a it is our not, under everybody. Web weekend. site contact Have safe much everybody information. Thank I very Investors’ Imperial our you tab. has If

Operator

in does and This program. for conference. conclude gentleman, today’s Ladies thank you participating today’s

disconnect. Everyone, have a day. You may all great