Imperial Oil

Imperial Oil Limited engages in the exploration, production, and sale of crude oil and natural gas in Canada. The company operates through three segments: Upstream, Downstream and Chemical segments. The Upstream segment explores and produces crude oil, natural gas, synthetic oil, and bitumen. 

As of December 31, 2021, this segment had 386 million oil-equivalent barrels of proved undeveloped reserves. The Downstream segment is involved in the transportation and refining of crude oil, the blending of refined products and the distribution, and marketing of refined products. It also transports crude oil to refineries by contracted pipelines, common carrier pipelines, and rail; maintains a distribution system to move petroleum products to market by pipeline, tanker, rail, and road transport; and owns and operates fuel terminals, natural gas liquids, and products pipelines in Alberta, Manitoba, and Ontario. 

In addition, this segment markets and supplies petroleum products to the motoring public through approximately 2,400 Esso and Mobil-branded sites. Further, it sells petroleum products, including fuel, asphalt, and lubricants for industrial and transportation customers, independent marketers, and resellers, as well as other refiners serving the agriculture, residential heating, and commercial markets through branded fuel and lubricant resellers. 

The Chemical segment manufactures and markets various petrochemicals, benzene, aromatic and aliphatic solvents, plasticizer intermediates, and polyethylene resin. Imperial Oil Limited has a strategic agreement with E3 Metals Corp. to advance a lithium-extraction pilot in Alberta. The company was incorporated in 1880 and is headquartered in Calgary, Canada. Imperial Oil Limited is a subsidiary of Exxon Mobil Corporation.

In April 1880, Jacob Lewis Englehart and sixteen prominent oil refiners in London and Petrolia formed Imperial Oil in response to Standard Oil's growing dominance of the oil market. Englehart was the driving force behind the partnership, hoping to emulate John D. Rockefeller and merge the entire Canadian oil industry into one conglomerate. Although the majority of Ontario's top oil producers agreed to join in the enterprise, notable exceptions were John Henry Fairbank, then Canada's largest oil producer, and James Miller Williams, founder of the Canadian Oil Company. Englehart and the refiners established Imperial Oil as a joint-stock company with a capitalized value of $500,000. 

In addition to Englehart, the original shareholders included Frederick A. Fitzgerald, Isaac and Herman Waterman, William Spencer and his sons, William and Charles, Thomas and Edward Hodgins, John Geary, Joseph Fallows, John Minhinnick, William English and John Walker. Together, the shareholders possessed twelve oil refineries and controlled eighty-five percent of the refining capacity in Canada. Fitzgerald and Englehart were the two largest stakeholders in the company and were named the president and vice president respectively. 

Imperial Oil's charter noted that its goal was to "find, produce, refine and distribute petroleum and its products throughout Canada". Despite a smooth start, Imperial Oil struggled to make a profit and issue dividends in the early 1880s. The discovery of new oil fields in Pennsylvania and New York drove down the price of oil, and the creation of the Standard Oil Trust resulted in an increase in American oil imports into Canada. In a deliberate move to boost kerosene prices, Imperial closed down ten of the twelve refineries it had acquired through the merger, leaving only the Silver Star refinery in Petrolia and the Victor works in London. In 1883, the Victor works were struck by lightning and burned to the ground, and under Englehart's direction, the company concentrated its refining efforts at Petrolia.

In 1884, Imperial Oil purchased the exclusive use of Herman Frasch's fractional distillation patent, which was more efficient at separating crude into usable products. Imperial initially offered Frasch $10,000 and Imperial Oil stock, but he persuaded the company to offer him a salary that matched Fitzgerald's, and a seat on the Board of Directors. Frasch had taken the position primarily to supervise the installation of his refining method at the Silver Star refinery and resigned in February 1885 once the work was complete. Frasch then joined John Minhinnick in forming a separate venture called the Empire Oil Company. The pair purchased an idle refinery in London, and Frasch began experimenting with a way to remove the sulphur content in the oil pumped at Lambton County. The high sulphur content in Canadian oil placed it at a disadvantage compared to the oil mined in Pennsylvania due to its "distinctive odour" when burned. Canadians called the product "skunk oil". Between 1885 and 1887, Frasch discovered that mixing copper oxide with the oil during the distilling process would remove the sulphur content and odour from the refined product. 

By this time, Standard Oil had also become interested in the desulphurization process after moving production to oil fields in Ohio that had a similar sulphur content to Lambton County. In 1886, Standard Oil persuaded Frasch to return to the United States and join their company by offering "a salary higher than that of any other scientist in the country", and an exchange of his shares in the Empire Oil Company for an equivalent amount in Standard Oil. After returning to the United States, Frasch perfected his desulphurization strategy, and Standard Oil held a monopoly on the process until 1905. The loss of Frasch and the desulphurization process was a major blow to the long-term future of Imperial Oil.

In spite of rising revenue and growth in the 1890s, Imperial Oil faced continuing challenges in its markets, most notably from Standard Oil, which operated a series of subsidiary companies across Canada. Although Imperial dominated the Western Canadian market, the company could not establish a strong foothold in the Maritimes or Quebec as Standard supplied these regions through long-term contracts with local companies. While the Conservative Party's National Policy had stopped Standard Oil from fully entering the Canadian market, the economic policy came under attack by Standard Oil lobbyists and Canadian consumers, who wanted a cheaper and higher quality product. In 1893, Ottawa reduced import duties on refined oil products from 7.2 cents to 6 cents per wine gallon, and in 1896, Wilfrid Laurier's government reduced the tariff again to 5 cents. More importantly, Laurier removed restrictions on tank cars and tank steamers, allowing foreign companies to bulk ship oil into Canada by rail or sea. Before Ottawa lifted the restriction, foreign companies had to repackage their product into oil barrels before entering Canada. This process added roughly five cents in shipping and handling charges to each gallon of imported oil.

In 1895, Imperial Oil's Board of Directors began negotiations to sell the company to the Colonial Development Corporation- a British company. After three years, the deal collapsed, and the Board of Directors instead chose to sell the company to Standard Oil. The agreement specified that Standard Oil would acquire 75 percent of Imperial Oil's shares, Imperial Oil would acquire all of Standard Oil's Canadian subsidiary companies, Imperial's capitalization would be increased to $1 million, and Imperial shareholders would receive a dividend of $93,000. Following the deal, Imperial Oil shut down the Silver Star refinery in Petrolia and moved its refining operations to Sarnia, Ontario.

In a landmark 1911 anti-trust case, the U.S. Supreme Court ordered Standard Oil to break up into 34 separate companies. Ownership of Imperial Oil, as well Standard Oil's other subsidiaries outside the U.S., were all transferred to only one of those 34 successor firms, Jersey Standard. Imperial Oil discovered the Leduc Woodbend Devonian oil reef in 1947, marking the beginning of the contemporary period in Canadian oil and gas development. Drilling began on the landmark discovery well Leduc No. 1 on November 20, 1946. In 1989, Imperial Oil acquired Texaco's Canadian operations. When Exxon and Mobil merged in 1999 to form ExxonMobil, the combined company continued to maintain Mobil's Canadian operations as a separate subsidiary, independent of Imperial Oil.

From the 1934-35 season through the 1975-76 season, Imperial Oil was a sponsor of the Canadian Broadcasting Corporation program Hockey Night in Canada for both radio and television broadcasts. Esso had three stars on their signs and leveraged it by sponsoring Hockey Night in Canada's three stars of the game. In the same era, the company was also involved in film production, frequently providing funding support for the production of independent documentary films. Calgary's Glenbow Museum holds a large collection of Imperial Oil's film inventory.

Imperial Oil supplies more than 2,000 service stations as of October 2020, all of which are owned by third parties. It sold its remaining 497 stations in 2016 to retailers such as Alimentation Couche-Tard, 7-Eleven, Parkland, Harnois (Quebec) and Wilson Fuel. In the late early 1990s, Imperial Oil acquired retail operations from Texaco's Canadian unit Texaco Canada Incorporated.

“Our goal is to do business in an economically, environmentally and socially responsible manner while delivering superior long-term value.”

“At Imperial, we believe that we can have reliable and affordable energy, a strong economy and a clean environment, and we're committed to making it happen.”