Imperial Oil released its third quarter 2026 results on October 30. Highlights from the release and conference call included weaker than expected upstream and downstream output due to third party outages, record downstream and consolidated earnings, and management contemplating moving up the FID timing for its next thermal oil sands project. Management also noted expectations for wide WCS differentials in Q4, driven by ocean freight rates.
Q3 was a busy quarter for planned turnarounds (Syncrude Coker 8-2, Cold Lake’s Mahihkan plant, Sarnia refinery). Total Upstream working interest production averaged 418 MBoe/d in Q3, down 10% year-over-year. Output was also impacted by several days of unplanned downtime at Kearl in September due to a third party (Woodland) pipeline outage. 2026 production guidance for Kearl on a 100% basis has been reduced from 285-295 Mb/d to 280 Mb/d, which implies a record ~322 Mb/d for Q4 (Imperial owns 69.6% of Kearl). With year-to-date Upstream production averaging 417 MBoe/d through September, hitting the low end of the 441-460 MBoe/d guidance range for 2026 requires ~512 MBoe/d in Q4, which appears to be out of reach at this point.
The Downstream division posted record quarterly earnings of CAD$1.55 billion despite relatively low refinery utilization (88%), contributing to record consolidated net income of CAD$2.45 billion. In addition to the Sarnia refinery turnaround, output was impacted by a third-party pipeline outage that lasted 18 days (Enbridge’s Line 5).
On the conference call the company noted it is targeting for Kearl to average 300 Mb/d gross by 2028, and also noted that it may FID its next greenfield thermal oil sands project (Aspen) earlier than the end of the decade, and may deploy solvent-assisted SAGD (SA-SAGD) at Aspen’s first phase, which Imperial already utilizes in some wells at Cold Lake. Previously Imperial had been planning to use Enhanced Bitumen Recovery Technology (EBRT) that it has been piloting, which involves a much more intensive use of vaporized solvent than SA-SAGD.
