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APRIL 2014 INVESTOR DAYS – Imperial Oil Limited

Imperial Oil Limited · Apr 2, 2014 · 80 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 1
    Investor Days April 1 - 2 , 2014
  2. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 2
    Agenda 9:30 a.m. Welcome John Charlton, Manager, Investor Relations Executive Summary Global Energy Outlook Rich Kruger, Chairman, President and CEO Corporate Overview Downstream & Chemical Paul Masschelin, Senior Vice-President,…
  3. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 3
    Executive summary 4 Imperial Investor Days 2014
  4. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 4
    Business overview Participation in all aspects of the value chain Sarnia refinery Syncrude mining Kearl mining Strathcona refinery Cold Lake cyclic steam Nanticoke refinery Research Sarnia Fuels & Lubes marketing…
  5. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 5
    Competitive assessment Industry leadership across all business lines Cold Lake Best-in-class operating performance; continued growth potential Syncrude High-value production; improvement actions ongoing Kearl Next generation…
  6. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 6
    Business environment Favourable investment climate, but not without challenges Large, accessible upstream resources Mature, competitive downstream markets Political stability, competitive fiscal regime Market access…
  7. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 7
    Organizational priorities Manage risks, maximize value and achieve profitable growth Focus on base business fundamentals SafetyOperational IntegrityReliabilityProfitability Implement asset-specific improvement plans Ensure quality…
  8. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 8
    Global energy outlook 9 Imperial Investor Days 2014
  9. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 9
    A worldwide view to 2040 2 billion more people on the planet 130 percent larger global economy about 35 percent greater demand for energy non-OECD countries lead the growth in demand about 60 percent of demand supplied by…
  10. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 10
    Demand for all energy sources to increase Global energy demand Quadrillion BTUs 250 2040 200 2010 150 100 50 0 Oil Gas Coal Nuclear Other Source: ExxonMobil 2014 Outlook for Energy; other includes biomass/waste,…
  11. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 11
    Oil sands production to continue to grow North American liquids mbd Demand Canadian Oil Sands Net Imports Biofuels Other Petroleum Crude & Condensate Source: ExxonMobil 2014 Outlook for Energy 12 Imperial Investor…
  12. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 12
    Corporate overview 13 Imperial Investor Days 2014
  13. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 13
    Business model Deliver superior, long-term shareholder value Long-life, competitively advantaged assets Disciplined investment and cost management Integration and synergies High-impact technologies and innovation Operational…
  14. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 14
    Imperial - ExxonMobil relationship Significant benefits that provide a unique competitive advantage Benefits to Imperial Personnel development Operational best practices Technology sharing Scale-related synergies Commercial…
  15. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 15
    Enterprise risk management Comprehensive systems to manage business risks 16 Imperial Investor Days 2014
  16. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 16
    Personnel safety Safety is first in all we do Workforce safety Incidents per 200,000 hours worked 1 Goal Nobody Gets Hurt 0.5 0 Industry Imperial 17 Imperial Investor Days 2014
  17. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 17
    Financial performance Results demonstrate the strength of our business model Net income /share 5 2013 Downstream & Other Earnings - billions 2.8 Upstream 4 Earnings - per share1 3.32 ROCE - % 12.9 3 Gross production2 -…
  18. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 18
    Business segment profitability High performing upstream and downstream businesses 2013 Upstream profitability 2013 Downstream profitability /oeb /bbl 20 20 15 15 10 10 5 5 0 0 IMO SU CVE HSE SU IMO CVE HSE…
  19. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 19
    Industry-leading return on capital employed Maximizing investment value and life-cycle performance 2013 5-year average % % 20 20 15 15 10 10 5 5 0 0 IMO SU HSE CNQ CVE IMO CVE HSE CNQ SU Source: company…
  20. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 20
    Unmatched shareholder distributions 13 billion returned to shareholders in last 10 years 2004-2013 Distributions billions 15 Share reductions 10 Dividends 5 IMO HSE SU CNQ CVE 21 Imperial Investor Days 2014
  21. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 21
    Long-life, high-quality proved reserves 3.6 billion oil-equivalent barrels, concentrated in world-class assets YE 2013 proved reserves billion oeb1 4 Other Syncrude 3 Cold Lake 2 1 Kearl 0 Year-end 2012 1after…
  22. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 22
    Large resource base 18 billion oil-equivalent barrels, up 10% in 2013 YE 2013 resource base billion oeb1 20 Other Gas 15 Growth Contingent opportunities Resource 10 Mining Liquids 5 Progressing Probable In situ…
  23. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 23
    Significant growth investments Spending 40+ billion this decade concentrated on upstream projects Average annual capex billions 6 5 4 3 2 1 0 2000-2009 2010-2014 2015-2020 Includes Upstream, Downstream,…
  24. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 24
    Production positioned to double 200 kbd of additional liquids capacity in funded projects Production outlook koebd1 600 New Opportunities Not yet Oil Sands - mining funded Oil Sands - in situ 400 Conventional Under…
  25. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 25
    Large cap growth comparison We estimate Imperial will exhibit the strongest per share growth in the peer group over the next several years, driven in large part by its expansions at Kearl. - Peters & Co. Estimated cash flow per share…
  26. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 26
    Downstream & Chemical overview 27 Imperial Investor Days 2014
  27. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 27
    Integration & synergies Delivering competitive advantage across the full value chain Production Refining Chemical Crude oil and natural gas Petroleum products Commodities and specialties 28 Imperial Investor Days 2014
  28. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 28
    Downstream & Chemical strategies Maximizing the value of every molecule Consistently deliver best-in-class performance Provide valued and high-quality products and services Lead industry in operating efficiency and…
  29. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 29
    Refining & Chemical Canadas largest refiner, integrated chemical facility Strathcona, Sarnia, Nanticoke Capacity: 421 kbd Sarnia Chemicals 2013 sales: 940 KT Efficient, well-positioned assets Integrated, advantaged…
  30. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 30
    Strong cash flow with selective investments More than 6 billion of net cash generated over the last 5 years Downstream & Chemical net cash Downstream & Chemical capex billions % of depreciation 150 2 100 1 50 0 0…
  31. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 31
    Maximizing refining value Lowering costs through advantaged feeds and energy efficiencies Mid-continent crude Indexed energy intensity % of throughput % 100 100 Industry Imperial 75 95 50 90 25 85 0 80 2010 2012…
  32. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 32
    Leveraging ExxonMobil global best practices Unique technical, operational and commercial support networks Systematic approach to achieve operational excellence: Personnel safety Energy efficiency Facility reliability…
  33. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 33
    Strong Chemical performance Top-tier polyethylene producer, low-cost feedstock, specialty customers Feedstock Indexed volume & unit margin % % Cost 100 200 Ethane High Margin Propane Volume 150 Marcellus ethane Ethane…
  34. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 34
    Fuels & Lubricants marketing World-class brands, extensive distribution system 1,700 sites; 470 company-owned Marketing brands: 2013 sales: 454 kbd Concentrated in premium markets High capability distributor network…
  35. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 35
    Marketing excellence Leading market share in all product segments Market Market share position Wholesale fuels 24% 1 Retail1 18% 2 Aviation 35% 1 Marine 30% 1 Asphalt 35% 1 Lubricants 27% 1 1Source: Q4 2013 Kent Market…
  36. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 36
    Retail value proposition Profitably fulfilling customer needs, industry-leading performance Esso rank Retail margin Retail measure vs. industry Site contribution 1 Non-fuel margin 1 Non-fuel Net site cash cost 1 Fuel Non-fuel…
  37. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 37
    Break 38 Imperial Investor Days 2014
  38. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 38
    Upstream overview 39 Imperial Investor Days 2014
  39. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 39
    Upstream strategies Operational excellence and profitable growth Maximize value of existing production Invest in projects that deliver superior results Enhance resource value through high-impact technologies Pursue the highest…
  40. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 40
    Cold Lake: a world-class in situ operation Industry-leading performance, further growth potential 100% Imperial, 1st production in 1985 4,500 wells, 150 kbd1 production 1.7B bbls 2P, 3.3B bbls contingent1 Large, high quality…
  41. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 41
    Industry-leading reliability Achieved through comprehensive, systematic approach 2013 reliability % of capacity IMO Cold Lake CVE Foster Creek CVE Christina Lake SU Firebag CNQ Primrose HSE Tucker Lake 0 20 40 60 80…
  42. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 42
    Competitive cost structure Achieved through operational integrity, life-cycle cost discipline 2013 cash operating costs /bbl HSE Tucker CVE Foster Creek SU Thermal IMO Cold Lake CVE Christina Lake CNQ Thermal 0 5 10…
  43. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 43
    Increasing resource recovery Achieved through technology, innovation and operational best practices 80 Cold Lake demonstrated recovery % 2010+ 60 2000s 40 1990s 1980s 20 1970s 0 Thermal Pilots Commercialization…
  44. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 44
    Nabiye project status Target start-up remains year-end 2014 Funded in 2012 for 2 billion 280 million bbls, 40 kbd production1 7 pads of 24 wells each 140 kbd steam generation 170 MW cogeneration Design one, build multiple…
  45. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 45
    Cold Lake production forecast Long-life plateau, significant growth potential kbd1 300 200 100 0 2013 2018 2023 2028 2033 1before royalties 46 Imperial Investor Days 2014
  46. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 46
    Syncrude: a pioneer in oil sands mining Strategic asset with improvement potential 25% Imperial, 1st production in 1978 Synthetic crude, 70 kbd production1 1.2B bbls 2P, 1.6B bbls contingent1 High-value production Competitive…
  47. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 47
    Competitive performance Targeted efforts to improve 3-year average capacity utilization % 100 80 60 40 20 0 Shell Syncrude Suncor CNRL Capacity 255 kbd 350 kbd 350 kbd 115 kbd Source: FirstEnergy Capital Corp.…
  48. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 48
    Focused on increasing production Priority is to improve reliability of existing facilities Syncrude production kbd1 80 Operating procedures 60 Equipment monitoring 40 Facility maintenance 20 Coker feed stability…
  49. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 49
    Executing sustaining projects Projects being delivered on schedule, on budget Average capex per year millions1 600 500 400 Aurora North Mine Relocation Aurora North Tailings Management 0.9 billion2 Complete 0.8 billion2…
  50. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 50
    Driving organizational effectiveness Delivering cost reductions, building capabilities Syncrude workforce employees 6000 Strengthening leadership structure Enhancing asset team accountability 5000 Increasing workforce…
  51. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 51
    Kearl: the next generation oil sands mine Establishing new performance standards 71% Imperial, 2013 initial start-up 220 kbd gross funded capacity1 3.6B bbls 2P, 1.0B bbls contingent1 Large, high-quality resource Proprietary…
  52. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 52
    Initial development update All three trains operational, ramping up to capacity Kearl bitumen production kbd, gross1 80 60 40 20 0 2Q13 3Q13 4Q13 1Q14 1100%, Est. before royalties 53 Imperial Investor Days…
  53. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 53
    Kearl production successfully marketed 19 refineries have processed to-date First processed in Imperial and ExxonMobil refineries Sales to third parties began in 4Q13 No operational issues Market demand continues to be…
  54. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 54
    55
  55. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 55
    High resource quality A life-cycle unit cost advantage Athabasca undeveloped mining resources ore grade, % bitumen Increasing Mining 12.0 Efficiency 11.5 Kearl Processing Increasing Efficiency 11.0 10.5 10.0…
  56. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 56
    Proprietary froth treatment Producing pipeline-quality crude without an on-site upgrader Sediment and water Existing mines Bitumen Synthetic crude Naphthenic froth treatment Onsite Refinery upgrader Sediment and water…
  57. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 57
    Improved environmental performance Wells-to-wheels GHGs about the same as average crude refined in U.S. % 125 Production Refining Distribution Combustion 100 75 50 California Mining synthetic Venezuela Kearl…
  58. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 58
    Efficient cost structure Sustain production at capacity, drive efficiencies Unit cash operating costs /bbl1 Expected 30 range 20 10 Initial Initial + Expansion Full Capacity 1before royalties 59 Imperial Investor…
  59. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 59
    Kearl Expansion Project 60 Imperial Investor Days 2014
  60. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 60
    61
  61. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 61
    Kearl expansion project status On schedule and on budget for start-up in 2015 Relative progress % complete 100% Same design as KID 80% Initial (KID) Same major contractors Expansion (KEP) 20% 60% Full-size modules in…
  62. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 62
    40+ year asset life Expansion potential to 345 kbd Kearl development plan kbd1 400 300 Expansion/Debottleneck evaluating 125 kbd 200 Expansion Project under construction 110 kbd 100 Initial Development - producing 110…
  63. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 63
    Market access strategy Ensure take-away capacity for all equity crude Optimize use of existing systems to maximize value Participate in multiple new pipeline opportunities Use rail options to bridge and provide contingency…
  64. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 64
    Industry transportation costs Significant value in minimizing transportation costs Alberta to U.S. Gulf Coast /bbl, indicative 25 20 15 10 5 0 Committed Walk-up Efficient Inefficient pipeline pipeline rail rail…
  65. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 65
    Pipeline projects Production and refining requirements covered Commitments to new capacity kbd 400 Currently transporting 400 kbd from Alberta 300 Secured 390 kbd of additional capacity 200 Base Keystone Gulf Coast Access…
  66. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 66
    Rail projects Capability to bridge gaps due to apportionment and pipeline timing Edmonton rail loading terminal Joint venture with Kinder Morgan Strategically located 100-250 kbd unit train capacity In service early 2015…
  67. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 67
    Future opportunities 68 Imperial Investor Days 2014
  68. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 68
    Research & technology World-class facilities, unmatched commitment IMO 1 billion Houston Calgary Upstream Upstream annually XOM Paulsboro Sarnia Downstream Downstream 69 Imperial Investor Days 2014
  69. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 69
    Oil sands research A history of success, new technologies being advanced In situ In situ Mining SA-SAGD CSP NAE Solvent-assisted Cyclic solvent Non-aqueous SAGD process extraction Deliver performance improvements and…
  70. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 70
    300+ kbd new in situ potential Development planning activities ongoing Resource potential 300,000 net acres 4.7 billion barrels1,2 Top-tier quality Enabling technology SAGD / SA-SAGD Potential scope 9+ phases 35-45 kbd per…
  71. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 71
    72 Imperial Investor Days
  72. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 72
    Aspen project 1.1 billion barrels potential, regulatory application submitted Three phases, 45 kbd each Design one, build multiple SAGD/SA-SAGD technology Regulatory filing: December 2013 Progressing technical…
  73. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 73
    Unconventional gas opportunities Large acreage position, development optionality Resource potential 540,000 net acres 20 TCF potential1,2 Liquids-rich Montney/Duvernay Development options Large-scale export project Drilling…
  74. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 74
    LNG Early stages of evaluating the competitiveness of an export project Government engagement Celtic acquisition Scoping facility February 2013 size & cost Fiscal and Resource Pipeline Liquefaction Shipping Regas Market…
  75. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 75
    Final comments 76 Imperial Investor Days 2014
  76. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 76
    Long-term potential Opportunities to produce 1 million barrels per day by 2030+ Production outlook kboed1 1before royalties 77 Imperial Investor Days
  77. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 77
    Factors impacting pace of further growth Project Competitiveness Technology Market Advancements Conditions Regulatory Financial Environment Considerations 78 Imperial Investor Days 2014
  78. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 78
    Business model Deliver superior, long-term shareholder value Long-life, competitively advantaged assets Disciplined investment and cost management Integration and synergies High-impact technologies and innovation Operational…
  79. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 79
    For more information www.imperialoil.ca Twitter /ImperialOil YouTube /ImperialOil LinkedIn /Imperial-Oil For more detailed investor information, or to receive annual and interim reports, please contact: John A. Charlton Manager,…
  80. APRIL 2014 INVESTOR DAYS – Imperial Oil Limited – slide 80

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