Imperial Oil Limited

• Date founded: 1880
• Industry: Energy; petroleum and natural gas extraction
• Corporate headquarters: Calgary, Alberta, Canada
• Type: Public

Overview

Imperial Oil Limited is an integrated energy company and one of Canada’s largest producers of petroleum and natural gas. Majority owned by American oil giant ExxonMobil and entrenched in all aspects of the petroleum industry, Imperial Oil’s activities include both upstream and downstream operations. In terms of its upstream operations, the company harvests crude oil and natural gas from existing extraction sites and actively searches for new sources of fuel. Most of Imperial Oil’s onshore extraction sites are located in Alberta, Ontario, and the Northwest Territories. It also conducts offshore operations in the Beaufort Sea and off Canada’s eastern coast in the North Atlantic. Along with its conventional petroleum and natural extraction efforts, Imperial Oil also extracts a considerable amount of heavy oil from its vast reserves of oil sands. Imperial Oil’s downstream operations include the transportation and refinement of crude oil, natural gas, and other materials, as well as the distribution and marketing of such products. Imperial Oil is Canada’s largest refiner of petroleum products. Its refineries can process nearly 400,000 barrels of crude oil per day. In 2023, the company reported a net income of $3.622 billion Canadian, an average production of 416,000 gross oil-equivalent barrels per day.

Much of the crude oil processed at Imperial Oil’s refineries is marketed under the Esso and Mobil brand names. With locations across the country, Esso is one of Canada’s leading gas station brands. In addition to gasoline and natural gas, Imperial Oil produces a wide range of other petroleum products, including everything from heating oil to diesel fuel, lubricants, fertilizers, building materials, and an array of chemicals used to manufacture plastics. While most of Imperial Oil’s products are provided to Canadian consumers, the company also operates in numerous export markets.

History

The founding of Imperial Oil was directly tied to the rise and fall of the early Canadian oil industry. The sinking of the first Canadian oil well in 1857 marked the beginning of a large oil boom that lasted through the 1860s and into the 1870s. Eager to strike it rich, many Canadians attempted to stake a claim in the industry. While this initially led to an extended oil rush and a widespread economic upturn, domestic overproduction and liberal free-trade policies eventually saturated the market and caused a dramatic collapse. As the bust took hold in 1876, devastated refiners across the country were forced to sell their businesses for next to nothing. Several years later in 1880, a group of sixteen successful Ontario businessmen joined forces to buy into Canada’s slumping oil industry. Their purchase led to the creation of the Imperial Oil Company.

In its early years, Imperial Oil operated two Ontario refineries, one in London and the other in Petrolia. To boost its sales, the company made a concerted effort to market higher quality products than its competitors and distribute them as widely as possible. This meant taking innovative steps like deodorizing their oil and importing brighter burning kerosene lamps from Germany. It also meant working to reach further out across Canada than any other oil company. In less than a year, Imperial Oil products were available in places as distant from Ontario as Winnipeg and Montreal. Eventually, this success backfired on the company to some extent. By the early 1890s, Imperial Oil had expanded its reach so far that it could no longer meet the demands of its market. To alleviate this problem, Imperial Oil’s leadership agreed to sell a majority interest in the company to the US-based Standard Oil group in 1898. This move proved to be a stabilizing force that allowed Imperial Oil to continue to thrive for years to come.

Much of Imperial Oil’s twentieth-century growth was fueled by the rise of the automobile. As an increasing number of automobiles took to Canadian roads over time, the demand for gasoline skyrocketed. To help meet this demand, Imperial Oil opened Canada’s first service station in 1907. Many other service stations eventually followed. After Standard Oil adopted the Esso brand name for the majority of its refined products in 1926, Imperial Oil began to do the same. The company’s service stations soon started using the Esso name as well. Esso remains one of the most recognizable service station brands in Canada.

Throughout the remainder of the twentieth century and into the twenty-first, Imperial Oil continued to seek out new sources of crude oil. This included the launch of oil sands extraction operations and various offshore drilling operations. The company also ventured into natural gas extraction. All of this allowed Imperial Oil to gradually evolve into a multi-billion dollar company that remains a leader in the Canadian oil industry.

In 2020, the company began operations of Alberta's Kearl Mine supplemental crushing facilities. However, the mine leaked toxic industrial wastewater containing mercury, benzene, arsenic, and naphthenic acids into nearby forests and wetlands for nine months in 2022. This breached the company’s trust with local Indigenous peoples, and the Alberta Energy Regulator issued an environmental protection order against Imperial Oil. The company apologized and began efforts to restore the environment, but their efforts were ongoing for several years following the spill.

Impact

As a leader in the Canadian petroleum and natural gas industry, Imperial Oil is at the forefront of research and technological innovation in the field. Imperial Oil is one of few Canadian energy companies to maintain dedicated research facilities. Scientists at these facilities work with other experts to come up with new ways of recovering energy resources and reducing environmental impacts. They also devote much time and energy to engineering new and improved products for Canadian consumers. In this way, Imperial Oil plays a major role in shaping both the future of the Canadian energy industry and that of Canada itself.

Imperial Oil is also known for its commitment to employee safety and environmental responsibility. Workplace safety is one of Imperial Oil’s highest priorities. Its “Nobody Gets Hurt” safety initiative is one of the most highly regarded in the energy industry. In addition, Imperial Oil continually strives to improve its environmental performance and has often been recognized for its efforts in this regard. Among other things, Imperial Oil has worked to avoid oil spills by improving prevention techniques through training, effective operations integrity management, and wide-ranging inspection and surveillance programs. However, environmental concerns have been a particular source of controversy for Imperial Oil. In addition to the obvious environmental issues related to the fossil fuel industry in general, Imperial Oil is often criticized for its reluctance to invest in renewable energy projects even as other Canadian oil companies have readily done so.

Imperial Oil maintains an ongoing commitment to corporate social responsibility by supporting communities across Canada through the Imperial Oil Foundation. The Imperial Oil Foundation serves to help provide funding for education in math and science, environmental and energy initiatives, and other programs that support local communities, including those of Canada’s First Nations peoples.

In 2022, Imperial Oil invested $720 million in a renewable diesel project at the Strathcona refinery, and the following year, the company established Low Carbon Solutions to help Canada's industries improve their sustainable energy plans. In 2024, the company became the first in its industry to use solvent-assisted steam-assisted gravity drainage (SA-SAGD) at its Cold Lake Grand Rapids project.

Bibliography

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“Company Overview.” Imperial Oil, www.imperialoil.ca/en-CA/Company/About/Company-overview. Accessed 20 Jan. 2025.

“Imperial Oil in Canada.” ExxonMobil, corporate.exxonmobil.com/Locations/Canada/Imperial-Oil-in-Canada. Accessed 20 Jan. 2025.

“Imperial Oil Limited.” Canadian Encyclopedia, 4 Mar. 2015, www.thecanadianencyclopedia.ca/en/article/imperial-oil-limited. Accessed 20 Jan. 2025.

"Oil Sands in Canada: Federal Actions on Kearl." Canadian Encyclopedia, www.canada.ca/en/environment-climate-change/services/oil-sands-monitoring/federal-actions-kearl-oil-sands.html. Accessed 20 Jan. 2025.

“Our History.” Esso, www.esso.ca/en-ca/our-history. Accessed 20 Jan. 2025.

“Our History.” Imperial Oil, www.imperialoil.ca/en-CA/Company/About/Our-history. Accessed 20 Jan. 2025.