IMPERIAL OIL <IMO.A> TO FOCUS ON HIGHER PROFIT
Imperial Oil Ltd, 70 pct owned by Exxon
Corp <XON>, will focus on maintaining its financial strength
and improving near-term earnings performance through operating
expense reductions and selective capital spending, the company
said in the annual report.
    Imperial Oil said it expects to spend about 750 mln dlrs on
capital and exploration expenditures in 1987, compared to 648
mln dlrs in 1986 and 1.16 billion dlrs in 1985.
    Imperial previously reported 1986 operating net profit fell
to 440 mln dlrs or 2.69 dlrs share from 694 mln dlrs or 4.27
dlrs share in the prior year.
    Imperial Oil said the attention to earnings results from
the desire to pursue longer term growth opportunities should
the investment climate improve and the belief that low or
volatile crude oil prices could continue during the next
several years.
    The company also said actions initiated during 1986 to
restructure and improve efficiency should continue to show
benefits in 1987.
    During 1986, the company cut operating, administrative and
marketing expenses by 91 mln dlrs and reduced the number of
workers by 16 pct to 12,500.
    Imperial chairman Arden Haynes said in the annual report
that it is too early to determine whether the recent upward
movement in international oil prices will be sustained.
    "It is still a time for prudence and caution, and the
company's actions will continue to be based on the fundamentals
of market supply and demand," he said.
    Haynes said prospects for the company's petroleum products
division are more promising than before, but are still
uncertain. Imperial's 1986 petroleum earnings rose to 174 mln
dlrs from 102 mln dlrs in 1985.
    Haynes said more satisfactory product margins on its
petroleum products could result if demand recovers as it has in
the United States.
    The company's chemicals business outlook is mixed, Haynes
said. Prospects for growth in petrochemical sales is good as
long as economic growth continues, but future large grain
surpluses could dampen fertilizer demand and maintain pressure
on prices.
    Imperial's chemical business earned 17 mln dlrs in 1986,
compared to three mln dlrs in 1985.
 Reuter
