What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-02-22 compared with 2022-02-23 · 146 added, 161 removed, 257 unchanged (54% of the section changed)

Imperial Oil Limited was incorporated under the laws of Canada in 1880 and was continued under the Canada Business Corporations Act

(the “CBCA”) by certificate of continuance dated April 24, 1978.

Imperial Oil Limited was incorporated under the laws of Canada in 1880 and was continued under the Canada Business Corporations Act (the “CBCA”) by certificate of continuance dated April 24, 1978.

The head and principal office of the company is located at 505 Quarry Park Boulevard S.E., Calgary, Alberta, Canada T2C 5N1.

4 unchanged sentences

In Canada, it is a major producer of crude oil, the largest petroleum refiner, a leading marketer of petroleum products, and a major producer of petrochemicals.

The company also pursues lower-emission business opportunities including carbon capture and storage and biofuels.

The company also pursues lower-emission business opportunities including carbon capture and storage, hydrogen and lower-emission fuels.

The company’s operations are conducted in three main segments:

Upstream, Downstream and Chemical.

Upstream operations include the exploration for, and production of, crude oil, natural gas, synthetic oil and bitumen.

Upstream operations include the exploration for, and production of, crude oil, natural gas, synthetic crude oil and bitumen.

Downstream operations consist of the transportation and refining of crude oil, blending of refined products and the distribution and marketing of those products.

7 unchanged sentences

All of the company’s reported reserves are located in Canada.

The company has reported proved reserves based on the average of the first-day-of-the-month

price for each month during the last 12-month

period ending December 31.

Natural gas is converted to an oil-equivalent

basis at six million cubic feet per one thousand barrels.

The company has reported proved reserves based on the average of the first-day-of-the-month price for each month during the last 12-month period ending December 31.

Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels.

No major discovery or other favourable or adverse event has occurred since December 31, 2022 that would cause a significant change in the estimated proved reserves as of that date.

Synthetic oil

oil-equivalent

Net proved reserves:

Developed 4 60 248 1,691 1,953

Undeveloped — 12 105 133 240

Total net proved 4 72 353 1,824 2,193

Liquids include crude oil, condensate and natural gas liquids (NGLs).

(a) Liquids include crude oil, condensate and natural gas liquids (NGLs).

NGL proved reserves are not material and are therefore included under liquids.

3 unchanged sentences

In addition, proved reserves could be affected by an extended period of low prices which could reduce the level of the company’s capital spending and also impact its partners’ capacity to fund their share of joint projects.

As a result of improved prices in 2021, under the U.S.

Securities and Exchange Commission definition of proved reserves, an additional 1.7 billion barrels of bitumen at Kearl and 0.5 billion barrels of bitumen at Cold Lake qualified as proved reserves at year-end

Technologies used in establishing proved reserves estimates

21 unchanged sentences

Proved undeveloped reserves

As at December 31, 2021, approximately 14 percent of the company’s proved reserves were proved undeveloped reflecting volumes of 386 million oil-equivalent

Proved undeveloped reserves are associated with Syncrude, Cold Lake, and the Montney and Duvernay unconventional assets.

This compared to 138 million oil-equivalent

barrels of proved undeveloped reserves reported at the end of 2020.

The increase of 248 million oil-equivalent

barrels of proved undeveloped reserves includes an increase of 262 million oil-equivalent barrels at Cold Lake, an increase of 6 million oil-equivalent

barrels at the Montney and Duvernay unconventional assets, partially offset by a decrease of 20 million oil-equivalent

barrels at Syncrude.

Conversion of proved undeveloped reserves into proved developed was 34 million oil-equivalent

barrels during 2021, associated with Cold Lake and the Montney and Duvernay unconventional assets.

Proved undeveloped reserves that have remained undeveloped for five years or more represent about 53 percent (204 million oil-equivalent

barrels) of proved undeveloped reserves and are associated with ongoing development programs at Cold Lake.

As at December 31, 2022, approximately 11 percent of the company’s proved reserves were proved undeveloped reflecting volumes of 240 million oil-equivalent barrels.

Proved undeveloped reserves are associated with Syncrude and Cold Lake.

This compared to 386 million oil-equivalent barrels of proved undeveloped reserves reported at the end of 2021.

The decrease of 146 million oil-equivalent barrels of proved undeveloped reserves includes a decrease of 133 million oil-equivalent barrels at Cold Lake associated with a shift of future development from the traditional Cyclic Steam Stimulation (CSS) to lower emissions intensity, solvent based technologies, a decrease of 7 million oil-equivalent barrels at Syncrude, and a decrease of 6 million oil-equivalent barrels due to the Montney and Duvernay unconventional assets sale.

No proved undeveloped reserves were converted into proved developed reserves during 2022.

Proved undeveloped reserves that have remained undeveloped for five years or more represent about 6 percent (14 million oil-equivalent barrels) of proved undeveloped reserves and are associated with ongoing development programs at Cold Lake.

These undeveloped reserves are planned to be developed in a staged approach to align with operational capacity and efficient capital spending commitment over the life of the asset.

3 unchanged sentences

The company has a disciplined investment strategy and many major fields require a long lead-time in order to be developed.

The company made investments of about $124 million during the year to progress the development of proved undeveloped reserves at Cold Lake, Syncrude and the Montney and Duvernay unconventional assets.

The company made investments of about $167 million during the year to progress the development of proved undeveloped reserves at Cold Lake and Syncrude.

These investments represented about 15 percent of the $1,128 million in total reported Upstream capital and exploration expenditures.

2 unchanged sentences

Average daily production of oil

The company’s average daily oil production by final products sold during the three years ended December 31, 2021 was as follows.

The company’s average daily oil production by final products sold during the three years ended

December 31, 2022 was as follows.

All reported production volumes were from Canada.

1 unchanged sentence

Total bitumen:

Synthetic oil (d)

Volume per day metrics are calculated by dividing the volume for the period by the number of calendar days in the period.

Gross production is the company’s share of production (excluding purchases) before deduction of the mineral owners’ or governments’ share or both.

Net production is gross production less the mineral owners’ or governments’ share or both.

The company’s synthetic oil production volumes were from the company’s share of production volumes in the Syncrude joint venture.

Liquids include crude oil, condensate and NGLs.

Synthetic crude oil (d) :

Liquids (e) :

(a) Volume per day metrics are calculated by dividing the volume for the period by the number of calendar days in the period.

(b) Gross production is the company’s share of production (excluding purchases) before deduction of the mineral owners’ or governments’ share or both.

(d) The company’s synthetic crude oil production volumes were from the company’s share of production volumes in the Syncrude joint venture and include immaterial amounts of bitumen and other products exported to the operator's facilities using an existing interconnect pipeline.

(e) Liquids include crude oil, condensate and NGLs.

Average daily production and production available for sale of natural gas

The company’s average daily production and production available for sale of natural gas during the three years ended December 31, 2022 are set forth below.

All reported production volumes were from Canada.

All gas volumes in this report are calculated at a pressure base of 14.73 pounds per square inch absolute at 60 degrees Fahrenheit.

All reported production volumes were from Canada and are calculated at a pressure base of 14.73 pounds per square inch absolute at 60 degrees Fahrenheit.

Reference is made to the portion of the “Financial section” entitled “Management’s discussion and analysis of financial condition and results of operations” on page 47 of this report for a narrative discussion on the material changes.

3 unchanged sentences

Net production available for sale (f)

Volume per day metrics are calculated by dividing the volume for the period by the number of calendar days in the period.

Gross production is the company’s share of production (excluding purchases) before deduction of the mineral owners’ or governments’ share or both.

Production of natural gas includes amounts used for internal consumption with the exception of the amounts reinjected.

Net production is gross production less the mineral owners’ or governments’ share or both.

Net production reported in the above table is consistent with production quantities in the net proved reserves disclosure.

Includes sales of the company’s share of net production and excludes amounts used for internal consumption.

Total average daily oil-equivalent

basis production

The company’s total average daily production expressed in an oil-equivalent

basis is set forth below, with natural gas converted to an oil-equivalent

basis at six million cubic feet per one thousand barrels.

(a) Volume per day metrics are calculated by dividing the volume for the period by the number of calendar days in the period.

(b) Gross production is the company’s share of production (excluding purchases) before deduction of the mineral owners’ or governments’ share or both.

(c) Production of natural gas includes amounts used for internal consumption with the exception of the amounts reinjected.

(d) Net production is gross production less the mineral owners’ or governments’ share or both.

(e) Net production reported in the above table is consistent with production quantities in the net proved reserves disclosure.

(f) Includes sales of the company’s share of net production and excludes amounts used for internal consumption.

Total average daily oil-equivalent basis production

The company’s total average daily production expressed in an oil-equivalent basis is set forth below, with natural gas converted to an oil-equivalent basis at six million cubic feet per one thousand barrels.

thousands of barrels per day (a) 2022 2021 2020

Total production oil-equivalent

Volume per day metrics are calculated by dividing the volume for the period by the number of calendar days in the period.

Gross production is the company’s share of production (excluding purchases) before deduction of the mineral owners’ or governments’ share or both.

Net production is gross production less the mineral owners’ or governments’ share or both.

Total production oil-equivalent basis:

(a) Volume per day metrics are calculated by dividing the volume for the period by the number of calendar days in the period.

(b) Gross production is the company’s share of production (excluding purchases) before deduction of the mineral owners’ or governments’ share or both.

Average unit sales price

1 unchanged sentence

Canadian dollars per barrel 2022 2021 2020

Synthetic oil

Bitumen 84.67 57.91 25.69

Synthetic crude oil 125.46 81.61 49.76

93.77 59.41 27.40

Canadian dollars per thousand cubic feet

Liquids include crude oil, condensate and NGLs.

Natural gas 5.69 3.83 1.90

(a) Liquids include crude oil, condensate and NGLs.

In 2022, Imperial's average Canadian dollar realization for bitumen increased generally in line with Western Canada Select (WCS).

The company's average Canadian dollar realizations for synthetic crude oil increased generally in line with West Texas Intermediate (WTI), adjusted for changes in exchange rates and transportation costs and reflect a premium over WTI driven by supply and demand.

In 2021, Imperial’s average Canadian dollar realizations for bitumen increased generally in line with Western Canada Select (WCS).

The company’s average Canadian dollar realizations for synthetic crude increased generally in line with West Texas Intermediate (WTI), adjusted for changes in exchange rates and transportation costs.

In 2020, Imperial’s average Canadian dollar realizations for bitumen decreased primarily due to a decrease in WCS.

The company’s average Canadian dollar realizations for synthetic crude decreased generally in line with WTI, adjusted for changes in exchange rates and transportation costs.

The company’s average Canadian dollar realizations for synthetic crude oil increased generally in line with West Texas Intermediate (WTI), adjusted for changes in exchange rates and transportation costs.

Average unit production costs

Canadian dollars per barrel 2022 2021 2020

Synthetic oil

Total oil-equivalent

Includes liquids, bitumen, synthetic oil and natural gas.

In 2021, bitumen unit production costs were higher, primarily driven by higher energy costs.

In 2021, synthetic oil unit production costs were higher, primarily driven by higher maintenance costs and mine tailings spend.

In 2020, bitumen unit production costs were lower, primarily driven by higher Kearl production due to improved reliability and reduced downtime related to the addition of supplemental crushing facilities in 2020, and cost saving activities in response to market conditions.

In 2020, synthetic oil unit production costs were lower, primarily driven by cost saving activities in response to

market conditions.

Bitumen 39.05 29.06 25.73

Synthetic crude oil 68.00 61.97 45.51

Total oil-equivalent basis (a)

44.02 34.32 28.73

(a) Includes liquids, bitumen, synthetic crude oil and natural gas.

In 2022, bitumen unit production costs increased, primarily driven by higher energy costs.

In 2022, synthetic crude oil unit production costs increased, primarily driven by higher energy costs.

In 2021, bitumen unit production costs increased, primarily driven by higher energy costs.

In 2021, synthetic crude oil unit production costs increased, primarily driven by higher maintenance costs and mine tailings spend.

Drilling and other exploratory and development activities

2 unchanged sentences

The following table sets forth the net exploratory and development wells that were drilled or participated in by the company during the three years ended December 31, 2022.

wells 2022 2021 2020

Net productive exploratory — — —

2 unchanged sentences

Net dry development — — —

Total 24 13 29

In 2022, wells drilled to add productive capacity include 24 development wells at Cold Lake.

In 2021, wells drilled to add productive capacity include 12 development wells at Cold Lake and 1 well associated with the Montney and Duvernay unconventional assets.

In 2020, wells drilled to add productive capacity include 28 development wells at Cold Lake and 1 well associated with the Montney and Duvernay unconventional assets.

In 2019, wells drilled to add productive capacity include 14 development wells at Cold Lake and 14 wells associated with the Montney and Duvernay unconventional assets.

Wells drilling

At December 31, 2021, the company was participating in the drilling of the following exploratory and development wells within the Montney and Duvernay unconventional assets.

At December 31, 2022, the company was drilling the following development wells to add productive capacity at Cold Lake.

All wells were located in Canada.

Wells Gross Net

Exploratory and development activities regarding oil and gas resources

1 unchanged sentence

In 2022, additional wells were drilled on existing phases.

In 2022, a development drilling program is planned within the approved development area to add productive capacity.

In 2023, an infill development drilling program is planned within the approved development area to add productive capacity.

Additionally, in 2022, the company approved the budget for the Leming steam-assisted gravity drainage (SAGD) project that will re-develop the original pilot area of the Cold Lake field, with development activities to commence in 2023 and start-up planned in 2024.

The company also conducts experimental pilot operations to improve recovery of bitumen from wells by means of new drilling, production or recovery techniques.

Aspen, Cold Lake expansion and other oil sands activities

In October 2018, the company received regulatory approval for the Aspen solvent-assisted, steam-assisted gravity drainage (SA-SAGD)

project from the Alberta Energy Regulator.

In October 2018, the company received regulatory approval for the Aspen solvent-assisted, steam-assisted gravity drainage (SA-SAGD) project from the Alberta Energy Regulator.

Development was proposed to occur in two phases, each producing about 75,000 barrels per day, before royalties.

4 unchanged sentences

Aspen’s project pace will continue to be evaluated and remains an important opportunity for Imperial.

In August 2018, Imperial received regulatory approval from the Alberta Energy Regulator for an expansion project at Cold Lake to develop the Grand Rapids interval using SA-SAGD

technology, capable of producing 50,000 barrels per day before royalties.

In August 2018, Imperial received regulatory approval from the Alberta Energy Regulator for an expansion project at Cold Lake to develop the Grand Rapids interval using SA-SAGD technology, capable of producing 50,000 barrels per day before royalties.

Imperial intends to develop the Grand Rapids reservoir through capital-efficient investments that make use of available steam capacity from existing plants, with the initial phase of Grand Rapids development planned as an extension from the Nabiye plant.

Imperial continues to progress this opportunity.

Work progresses on technical and technology evaluations to support potential Clarke Creek, Corner, Clyden and Chard in-situ

development regulatory applications.

In April 2022, the Grand Rapids Phase 1 (GRP1) project was approved by the company's board with a forecasted average production of 15,000 barrels per day before royalties.

Development activities are planned to be completed by year-end 2023.

Work progresses on technical and technology evaluations to support potential Clarke Creek, Corner, Clyden and Chard in-situ development regulatory applications.

The company also has interests in other oil sands leases in the Athabasca region of northern Alberta.

2 unchanged sentences

Montney and Duvernay

The company owns a 50 percent interest in XTO Energy Canada which includes the Montney and Duvernay unconventional assets located in central Alberta.

In 2020, the company ramped down development drilling and revised long-term development plans to exclude a significant portion of the non-core,

non-producing

and undeveloped areas of the Montney and Duvernay unconventional assets.

In 2021, the company resumed limited drilling activity to develop select portions of the acreage with other operators.

In January 2022, Imperial announced its intention to market its interest in XTO Energy Canada jointly with ExxonMobil Canada, consistent with Imperial’s strategy to focus its upstream resources and efforts on its key oil sands assets.

A definitive decision to sell the Montney and Duvernay unconventional assets has not been made.

Operations will continue as normal throughout the marketing process and should the process not result in a sale.

XTO Energy Canada net production from these assets is about 140 million cubic feet of natural gas per day and about 9,000 barrels per day of crude, condensate and natural gas liquids.

The company owned a 50 percent interest in XTO Energy Canada, which included Montney and Duvernay unconventional assets located in central Alberta.

On August 31, 2022, jointly with ExxonMobil Canada, Imperial sold its interests in XTO Energy Canada to Whitecap Resources Inc.

The sale completed the marketing effort announced in January 2022, and is consistent with Imperial’s strategy to focus upstream resources on key oil sands assets and its commitment to deliver long-term value to shareholders.

The assets included 567,000 net acres in the Montney shale, 72,000 net acres in the Duvernay shale and additional acreage in other areas of Alberta.

Net production from these assets was about 140 million cubic feet of natural gas per day and about 9,000 barrels of crude, condensate and natural gas liquids per day.

The sale of the assets followed the company's ramp down of drilling activity and adjustment of long-term development plans in 2020 and 2021.

The company holds a 25 percent interest in two exploration licences in the Beaufort Sea.

1 unchanged sentence

Existing licences were not impacted.

In June 2019, the Federal Government approved selective changes to the Canada Petroleum Resources Act

to prohibit and freeze the existing licences through the completion of the Beaufort Sea Regional Environmental Assessment (BR-SEA)

In 2021, the prohibition was extended until December 31, 2022, during which time the Federal Government will continue to consult with stakeholders as part of the BR-SEA

review to address regional social, environmental, economic and spill response impacts of natural resource development in the Arctic.

The company continues to hold the licences while maintaining community engagement and participation in the BR-SEA

In June 2019, the Federal Government approved selective changes to the Canada Petroleum Resources Act to prohibit and freeze the existing licences through the completion of the Beaufort Regional Strategic Environmental Assessment (BR-SEA) review.

In 2022, the prohibition was extended to December 31, 2023 with a second one-year extension.

During this time, the Federal Government plans to finalize the BR-SEA for public release which will be subject to a stakeholder review period that will aim to address regional social, environmental, economic and spill response impacts of natural resource development in the Arctic.

The company continues to hold the licences while maintaining community engagement and participation in the BR-SEA process.

Exploratory and development activities regarding oil and gas resources extracted by mining methods

2 unchanged sentences

Review of principal ongoing activities

Kearl is a joint venture established to recover shallow deposits of oil sands using open-pit

mining methods to extract the crude bitumen, which is processed through extraction and froth treatment trains.

Kearl is a joint venture established to recover shallow deposits of oil sands using open-pit mining methods to extract the crude bitumen, which is processed through extraction and froth treatment trains.

The company holds a 70.96 percent participating interest in the joint venture and ExxonMobil Canada Properties holds the other 29.04 percent.

2 unchanged sentences

During 2022, the company’s share of Kearl’s net bitumen production was about 157,000 barrels per day and gross production was about 172,000 barrels per day.

Total gross production for Kearl was about 263,000 barrels per day (186,000 barrels Imperial’s share), setting a new record for Kearl and continuing multi-year improvements in reliability, costs and performance.

Total gross production increased about 41,000 barrels per day (28,000 barrels Imperial’s share) compared to 2020, which was the asset’s previous annual production record.

Increased production was primarily driven by the absence of prior year production balancing with market demands, supported by the supplemental crushers and other reliability improvements.

Kearl also eliminated its fall turnaround and transitioned to a single annual turnaround, one year ahead of schedule.

Kearl successfully started up the first Kearl Boiler Flue Gas heat recovery unit in 2021.

This technology recovers waste heat from a boiler’s combustion exhaust to pre-heat

process water.

This not only has the potential to reduce operating costs, but also emissions by up to 30,000 tonnes / year of carbon dioxide equivalent.

Imperial is currently progressing plans to apply this innovative technology on up to five additional boilers.

Cold Lake is an in-situ

heavy oil bitumen operation.

Total gross production for Kearl was about 242,000 barrels per day (172,000 barrels Imperial’s share), down 21,000 barrels per day (14,000 barrels Imperial's share) compared to 2021, as a result of extreme cold weather impacts in the first quarter of 2022.

In 2022, the company successfully completed the startup of the second Boiler Flue Gas Unit, incorporating learnings from the first unit's startup in 2021.

This technology recovers waste heat from a boiler’s combustion exhaust to pre-heat process water.

Each unit has the potential to reduce operating costs and emissions.

Imperial is currently progressing plans to apply this innovative technology on up to four additional boilers by year-end 2023.

Cold Lake is an in-situ heavy oil bitumen operation.

The product, a blend of bitumen and diluent, is typically shipped to the company’s refineries, Exxon Mobil Corporation refineries and to other third parties.

1 unchanged sentence

Gross production increased about 4,000 barrels per day compared to 2021 as a result of improved reliability, production optimizations, and recent capital-efficient infill drilling.

Syncrude is a joint venture established to recover shallow deposits of oil sands using open-pit

mining methods to extract crude bitumen, and then upgrade it to produce a high-quality, light (32 degrees API), sweet, synthetic crude oil.

Cold Lake has expanded its commercial application of Liquid Addition to Steam for Enhanced Recovery (LASER), with the technology now being applied to approximately 10 per cent of production, resulting in reduced greenhouse gas emissions compared to traditional CSS technology.

Syncrude is a joint venture established to recover shallow deposits of oil sands using open-pit mining methods to extract crude bitumen, and then upgrade it to produce a high-quality, light (32 degrees API), sweet, synthetic crude oil.

The company holds a 25 percent participating interest in the joint venture.

The produced synthetic crude oil is typically shipped to the company’s refineries, Exxon Mobil Corporation refineries and to other third parties.

In 2021, the company’s share of Syncrude’s net production of synthetic crude oil was about 62,000 barrels per day and gross production was about 71,000 barrels per day.

On September 30, 2021, operatorship successfully transferred from Syncrude Canada to Suncor.

With the transition complete, additional synergies are expected to be captured, in an effort to maximize profitability and improve reliability.

In 2022, the company’s share of Syncrude’s net production was about 63,000 barrels per day.

The gross production was about 77,000 barrels per day, which is an increase of about 6,000 barrels per day compared to 2021, supported by the interconnect pipeline.

The Province of Alberta, in its capacity as lessor of Kearl, Cold Lake, and Syncrude oil sands leases, is entitled to a royalty on production.

7 unchanged sentences

The statistics in the table are determined in part from information received from other operators.

Year ended December 31, 2021

Year ended December 31, 2020

Gross wells are wells in which the company owns a working interest.

Net wells are the sum of the fractional working interest owned by the company in gross wells, rounded to the nearest whole number.

Multiple completion wells are permanently equipped to produce separately from two or more distinctly different geological formations.

2021, the company had an interest in 12 gross wells with multiple completions (2020 - 12 gross wells).

The total number of wells decreased in 2022 primarily due to divestment activities and the shut-in of multiple non-economical wells.

Year ended December 31, 2022 Year ended December 31, 2021

Crude oil Natural gas Crude oil Natural gas

wells Gross (a)

4,277 4,264 2,419 774 4,557 4,509 2,729 885

(a) Gross wells are wells in which the company owns a working interest.

(b) Net wells are the sum of the fractional working interest owned by the company in gross wells, rounded to the nearest whole number.

(c) Multiple completion wells are permanently equipped to produce separately from two or more distinctly different geological formations.

At year-end 2022, the company had an interest in 12 gross wells with multiple completions (2021 - 12 gross wells).

Land holdings

At December 31, 2021 and December 31, 2020, the company held the following oil and gas rights, and bitumen and synthetic oil leases, all of which are located in Canada, specifically in the western provinces, in the Canada lands and in the Atlantic offshore.

At December 31, 2022 and December 31, 2021, the company held the following oil and gas rights, and bitumen and synthetic crude oil leases, all of which are located in Canada, specifically in the western provinces, in the Canada lands and in the Atlantic offshore.

Developed Undeveloped Total

thousands of acres 2022 2021 2022 2021 2022 2021

Western provinces (a):

Liquids and gas

Synthetic oil

Liquids and gas - gross (b)

441 1,059 185 621 626 1,680

260 517 135 350 395 867

Bitumen - gross (b)

196 196 584 584 780 780

182 182 255 255 437 437

Synthetic crude oil - gross (b)

119 119 100 100 219 219

30 30 25 25 55 55

Canada lands (d) :

Liquids and gas

Liquids and gas - gross (b)

2 2 1,803 1,803 1,805 1,805

2 2 495 495 497 497

Atlantic offshore:

Liquids and gas

Western provinces include British Columbia and Alberta.

Gross acres include the interests of others.

Net acres exclude the interests of others.

Canada lands include the Arctic Islands, Beaufort Sea / Mackenzie Delta, and other Northwest Territories.

Certain land holdings are subject to modification under agreements whereby others may earn interests in the company’s holdings by performing certain exploratory work (farm-out)

and whereby the company may earn interests in others’ holdings by performing certain exploratory work (farm-in).

Liquids and gas - gross (b)

65 65 146 267 211 332

6 6 22 36 28 42

823 1,441 2,818 3,375 3,641 4,816

480 737 932 1,161 1,412 1,898

(a) Western provinces include British Columbia and Alberta.

(b) Gross acres include the interests of others.

(d) Canada lands include the Arctic Islands, Beaufort Sea / Mackenzie Delta, and other Northwest Territories.

(e) Certain land holdings are subject to modification under agreements whereby others may earn interests in the company’s holdings by performing certain exploratory work (farm-out) and whereby the company may earn interests in others’ holdings by performing certain exploratory work (farm-in).

Western provinces

2 unchanged sentences

In addition, the company has interests in other bitumen oil sands leases in the Athabasca areas totalling about 173,000 net acres, which include about 62,000 net acres of oil sands leases in the Clyden area, about 34,000 net acres of oil sands leases in the Aspen area, about 30,000 net acres of oil sands leases in the Corner area, about 29,000 net acres in the Clarke Creek area and about 18,000 net acres in the Chard area.

The 173,000 net acres are suitable for in-situ

recovery techniques.

The company’s share of Syncrude joint venture leases covering about 55,000 net acres accounts for the entire synthetic oil acreage.

The 173,000 net acres are suitable for in-situ recovery techniques.

The company’s share of Syncrude joint venture leases covering about 55,000 net acres accounts for the entire synthetic crude oil acreage.

Oil sands leases have an exploration period of 15 years and are continued beyond that point by payment of escalating rentals or by production.

The majority of the acreage in Cold Lake, Kearl and Syncrude is continued by production.

The company holds interests in an additional 867,000 net acres of developed and undeveloped land in the western provinces related to crude oil and natural gas, including about 369,000 net acres associated with the company’s unconventional portfolio in Alberta.

These interests include lands that are part of Imperial’s recent announcement to market its interest in XTO Energy Canada jointly with ExxonMobil Canada.

XTO Energy Canada assets include 568,000 net acres in the Montney shale, 85,000 net acres in the Duvernay shale and additional acreage in other areas of Alberta;

Imperial owns a 50 percent interest in XTO Energy Canada.

This is consistent with Imperial’s strategy to focus its upstream resources and efforts on its key oil sands assets.

The company holds interests in an additional 395,000 net acres of developed and undeveloped land in the western provinces related to crude oil and natural gas.

In 2022, the company divested its interest in Horn River totalling about 103,000 net acres and its interest in XTO Energy Canada totalling about 365,000 net acres.

Crude oil and natural gas leases and licences from the western provinces have exploration periods ranging from two to 15 years and are continued beyond that point by proven production capability.

24 unchanged sentences

Nanticoke, Ontario 110 101 84 113

Total 418 379 340 433

Utilization of refinery capacity (percent)

Refinery throughput is the volume of crude oil and feedstocks that is processed in the refinery atmospheric distillation units.

Rated capacities are based on definite specifications as to types of crude oil and feedstocks that are processed in the refinery atmospheric distillation units, the products to be obtained and the refinery process, adjusted to include an estimated allowance for normal maintenance shutdowns.

(a) Refinery throughput is the volume of crude oil and feedstocks that is processed in the refinery atmospheric distillation units.

(b) Rated capacities are based on definite specifications as to types of crude oil and feedstocks that are processed in the refinery atmospheric distillation units, the products to be obtained and the refinery process, adjusted to include an estimated allowance for normal maintenance shutdowns.

Accordingly, actual capacities may be higher or lower than rated capacities due to changes in refinery operation and the type of crude oil available for processing.

Improved refinery throughput in 2021 primarily reflects reduced impacts associated with the COVID-19

pandemic, partially offset by a planned turnaround at Strathcona.

Lower throughput was driven by reduced demand due to the COVID-19

pandemic, partially offset by lower refinery turnaround activity and reliability events, including impacts from the Sarnia fractionation tower incident which occurred in April 2019.

Improved refinery throughput in 2022 was primarily driven by increased demand and reduced turnaround activity.

Improved refinery throughput in 2021 primarily reflects reduced impacts associated with the COVID-19 pandemic, partially offset by a planned turnaround at Strathcona.

The company maintains a nationwide distribution system to move petroleum products to market by pipeline, tanker, rail and road transport.

1 unchanged sentence

The company markets petroleum products throughout Canada under well-known brand names, most notably Esso and Mobil, to all types of customers.

Imperial supplies petroleum products to the motoring public through Esso and Mobil-branded sites and independent marketers.

At the end of 2021, there were about 2,400 sites operating under a branded wholesaler model whereby Imperial supplies fuel to independent third parties who own and operate sites in alignment with Esso and Mobil brand standards.

Imperial supplies petroleum products through Esso and Mobil-branded sites and independent marketers.

At the end of 2022, there were about 2,400 sites operating under a branded wholesaler model, in alignment with Esso and Mobil brand standards, whereby Imperial supplies fuel to independent third parties.

Imperial also sells petroleum products, including fuel, asphalt and lubricants, to large industrial and transportation customers, independent marketers, resellers, as well as other refiners.

2 unchanged sentences

thousands of barrels per day 2022 2021 2020

Gasolines 229 224 215

Heating, diesel and jet fuels 176 160 146

Heavy fuel oils

Lube oils and other products 47 45 40

Heavy fuel oils 23 27 20

Net petroleum product sales 475 456 421

In 2021, improved petroleum product sales primarily reflects reduced impacts associated with the COVID-19

In 2020, lower sales were primarily driven by reduced demand due to the COVID-19

The company’s Chemical operations manufacture and market benzene, aromatic and aliphatic solvents, plasticizer intermediates and polyethylene resin.

In 2022, improved petroleum product sales primarily reflects increased demand.

In 2021, improved petroleum product sales primarily reflects reduced impacts associated with the COVID-19 pandemic.

The company’s Chemical operations manufacture and market benzene, aromatic and aliphatic solvents, plasticizer intermediates, polyethylene resin, and markets refinery grade propylene.

Its petrochemical and polyethylene manufacturing operations are located in Sarnia, Ontario, adjacent to the company’s petroleum refinery.

2 unchanged sentences

Total petrochemical sales 842 831 749

In 2022, sales volumes increased primarily due to higher sales of propylene and polyethylene, partially offset by lower intermediates.

In 2021, sales volumes increased primarily due to higher sales of intermediates and aromatics.

In 2020, sales volumes increased primarily due to higher sales of intermediates.

Human capital resources

26 unchanged sentences

Project approval

Approvals and licences from relevant provincial or federal

governmental or regulatory bodies are required for the company to carry out, or make modifications to, its oil and gas activities.

Approvals and licences from relevant provincial or federal governmental or regulatory bodies are required for the company to carry out, or make modifications to, its oil and gas activities.

The project approval process for major projects can involve, among other things, environmental assessments (including relevant mitigation measures), stakeholder and Indigenous consultation and input regarding project concerns, and public hearings.

Approval may be subject to various conditions and commitments arising through these processes.

In 2019, the Canadian government implemented a new environmental assessment framework in Canada under the Impact Assessment Act

(IAA), which may impact the manner in which large energy projects are approved.

greenhouse gas emissions by 2050), reliance on strategic and regional assessments and adjusted regulatory review timelines.

Approval of large energy projects may be impacted by the environmental assessment framework under Canada's Impact Assessment Act (IAA).

The IAA includes broader consideration for social, health, and gender-based impacts, the impact on Canada’s climate change commitments (including a requirement under the Strategic Assessment for Climate Change to provide a credible plan for the project to deliver net-zero greenhouse gas emissions by 2050), reliance on strategic and regional assessments and adjusted regulatory review timelines.

Environmental protection

12 unchanged sentences

In 2022, the company’s environmental capital and operating expenditures totalled approximately $1.4 billion, which was spent primarily on activities to protect the air, land and water, including remediation projects.

Capital and operating expenditures relating to environmental protection are expected to be about $1.0 billion in 2022.

Environmental expenditures are expected to increase to approximately $1.8 billion in 2023, with capital expenditures expected to account for approximately 65 percent of the total.

Costs for 2024 are anticipated to increase to approximately $2.2 billion, with capital expenditures expected to account for approximately 69 percent of the total.

The maximum allowable gross production of crude oil from wells in Canada is subject to limitations by various regulatory authorities on the basis of engineering and conservation principles.

Additionally, the Government of Alberta has in the past used temporary mandatory production curtailment regulations to impose production limits on large producers in Alberta.

Mandatory production curtailments were implemented in January 2019 and eliminated in December 2020.

By the end of 2021, the regulatory authority to impose curtailments was repealed.

Additionally, the Government of Alberta has in the past used temporary mandatory production curtailment regulations to impose production limits on large producers in Alberta, such as those implemented in 2019 and repealed in 2021.

Export contracts of more than one year for light crude oil and petroleum products and two years for heavy crude oil (including bitumen) require the prior approval of the Canada Energy Regulator (CER) and the Government of Canada.

12 unchanged sentences

Investment Canada Act

The Investment Canada Act

requires Government of Canada approval, in certain cases, of the acquisition of control of a Canadian business by an entity that is not controlled by Canadians.

The Investment Canada Act requires Government of Canada approval, in certain cases, of the acquisition of control of a Canadian business by an entity that is not controlled by Canadians.

The acquisition of natural resource properties may, in certain circumstances, be considered a transaction that constitutes an acquisition of control of a Canadian business requiring Government of Canada approval.

4 unchanged sentences

The Competition Bureau seeks to ensure that Canadian businesses and consumers prosper in a competitive and innovative marketplace.

The Competition Bureau is responsible for the administration and enforcement of the Competition Act

The Competition Bureau is responsible for the administration and enforcement of the Competition Act (the Act).

A merger transaction, whether or not notifiable, is subject to examination by the Commissioner of the Competition Bureau to determine whether the merger will have, or is likely to have, the effect of preventing or lessening substantially competition in a definable market.

5 unchanged sentences

The company online

The company’s website www.imperialoil.ca

contains a variety of corporate and investor information, including the company’s annual report on Form 10-K,

quarterly reports on Form 10-Q

and current reports on Form 8-K

and amendments to these reports.

The company’s website www.imperialoil.ca contains a variety of corporate and investor information free of charge, including the company’s annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and amendments to these reports.

These reports are made available as soon as reasonably practicable after they are filed or furnished to the SEC.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business