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Imperial Oil says it will depreciate between $ 900 million and $ 1.2 billion this quarter as it no longer expects to develop “a significant portion” of its unconventional operations in Alberta.
The Calgary-based company said the assets are non-productive and undeveloped, so Imperial does not expect any future cash outlays related to the impairment.
The devaluation does not include the high-value, cash-rich portion of the company’s unconventional asset portfolio that it said it still intends to develop.
“This decision is consistent with Imperial’s strategy to focus its resources and upstream efforts on its core oil sands assets, as well as only the most attractive parts of its unconventional portfolio. As such, the decision will have no impact. on production estimates provided earlier, “the company said in a statement on Monday.
Global oil demand plummeted earlier this year with the outbreak of the pandemic. Prices have yet to really recover.
The Organization of Petroleum Exporting Countries (OPEC) has predicted that global demand will return more slowly next year than previously thought, but that access to a vaccine could lead to less uncertainty and economic growth. This and other perspectives have seen some companies downsize their development plans.
Exxon Mobil, which has a majority stake in Imperial, also announced on Monday a devaluation – the largest ever – stating that it would devalue the value of natural gas properties from $ 17 billion to $ 20 billion US, plus to cut project spending next year to its lowest level in 15 years.
Last week, Imperial said it will lay off approximately 200 of its 6,000 employees as part of a cost-cutting initiative. It has also reduced the number of contractors it employs by around 450 since the beginning of the year.
CBC News contacted the Alberta Energy Minister for comment.
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