Imperial Oil Limited (AMEX:IMO) Q4 2023 Earnings Call Transcript

Neil Mehta : Yeah, that makes sense, Dan. And thanks, Brad. And just a follow-up is just your perspective on the differentials. I know in the prepared remarks you talked a little bit about when TMX comes online, you expect some of these differentials will tighten up. But maybe you could talk about both, the outlook for WCS, but also the outlook for Syncrude and Edmonton mix suite, because those light crude diffs have been a little softer than many would have expected.

Brad Corson : Yeah, thanks for the comment. And I always want to avoid forecasting too much around differentials, because there are just so many factors that come into play. I made the comment around TMX, because there is kind of a major structural shift that’s about to occur. When you bring that much additional capacity onto the system, that I think will have a structural impact on heavies. I think there will be, if you will, kind of a carryover impact on light differentials as well, and so we will see likely some tightening of those as well. Of course, in our case, we’re well integrated across the Upstream and the Downstream. So the financial implications of that is muted, if you will, in our company relative to others. When we see extremely strong pricing in the Upstream, certainly there’s a bit of a hit in the Downstream.

But the net-net of that is positive for us, and we would expect that to continue. And I guess the same with Syncrude and SSP. It’s obviously a bit unusual that that’s currently trading at a discount to WTI. It normally trades more at a premium. And I think longer term, there’s a few short term things in the market I think that are driving that longer term. I think we would expect it to settle in at a premium over WTI like it’s been historically. So that’s probably the most I could say, kind of again, given the normal volatility and uncertainty in the market.

Neil Mehta : Yeah, that’s great. Thanks Brad.

Operator: This concludes today’s question-and-answer session. I would now like to turn the call back to Peter Shaw, VP of Investor Relations for any additional or closing remarks.

Peter Shaw : Thank you. And so on behalf of the management team, I would like to thank everyone for joining us this morning. If there are further questions, please don’t hesitate to reach out to anybody on the Investor Relations team and we’ll be happy to answer your questions. And with that, thank you very much and have a great day.

Operator: This concludes today’s call. Thank you for your participation and you may now disconnect.