02 February 2007 19:20 [Source: ICIS news]
TORONTO (ICIS news)--The chemicals business of Imperial Oil - the ExxonMobil-controlled Canadian oil and petrochemicals company – is key in helping Imperial avoid exposure to commodity and other risks, analysts said on Friday.
Its downstream refining, petrochemicals and chemicals businesses provide Imperial with a size and diversification most Canadian energy firms do not have, Citigroup said in a research note to clients.
Imperial’s business structure – from oil and gas through petroleum products to chemicals – is complementary, helping curb the firm’s exposure to commodity prices, interest rates and currency risk, the analysts said.
In addition, Calgary-based Imperial has a very strong financial position, they said.
Commenting on Imperial Oil's fourth-quarter 2006 chemicals results, Citigroup said that sales volumes and lower operating costs drove earnings up, compared with the 2005 fourth quarter.
Chemical margins for key products polyethylene (PE) and benzene remained strong, the analysts said. However, margins are off from their peaks, they noted.
Demand softened for Imperial’s PE with more capacity online and benzene prices were lower but remained strong during the quarter, the analysts added.
Overall, Citigroup said, Imperial’s downstream and marketing business performed better than expected in the fourth quarter considering the fire, downtime and maintenance at its refinery at the Sarnia petrochemicals hub in Ontario.
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