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Chairman's letter
As a petroleum producer, our challenge is to meet energy demand reliably, efficiently and responsibly. Not only is it imperative that we find ways to access, produce and process new sources of oil and natural gas, but we must do so in a manner that minimizes our impacts on the environment.
This will require producing what we want – crude oil, natural gas, petroleum products and petrochemicals – while reducing what we don’t want – wastes and emissions. We also have a duty to conduct our business in a way that protects our workers and supports the communities that contribute to our success. Together these challenges make up our primary responsibilities as a corporate citizen.
Imperial’s record of corporate citizenship in 2006 was noteworthy on many fronts:
| > Extensive refinery modifications to produce ultra-low sulphur diesel fuel were completed. This was a major undertaking which today delivers a new generation of fuel with fewer vehicle emissions and cleaner air for all Canadians.
> We continued to actively engage local communities on our long-range development plans. A focus of our efforts was consultation in support of our proposed Kearl oil sands project in northern Alberta. From this dialogue, we identified new ways to involve local communities, mitigate unwanted impacts and strengthen relationships.
> We contributed $12.4 million to support more than 400 community initiatives across Canada.
> Last year’s earnings of more than $3 billion were the highest in the company’s history, and resulted in benefits to a wide variety of stakeholders, including shareholders, governments, suppliers and employees. While we are proud of this progress, we did not achieve everything we set out to do during the year. Our long-term safety record remained strong, but did not match the level of performance achieved in 2005. In particular, contractor safety posed a unique challenge much of the year. In response, we are further strengthening our management systems and procedures, and are improving field support for contractors through safety meetings, mentoring and training sessions. We will exert every effort to improve our performance, in line with our goal of “Nobody Gets Hurt.”
Climate change is an important issue for Canadians. We believe that fossil fuels will continue to provide most of the world’s energy supply for the foreseeable future. Consequently, we remain committed to expanding the use of economic, lower-emission technologies while maintaining the search for innovative approaches that can reduce greenhouse gas emissions. In the near term, our efforts are focused on improving the energy efficiency of our operations. However, we are also funding a variety of longer-term initiatives to bring about large-scale improvements, including the Integrated CO2 Network, the Imperial Oil-Alberta Ingenuity Centre for Oil Sands Innovation and Stanford University’s Global Climate and Energy Project.
In today’s world, our success will only be as good as our record of addressing environmental and other citizenship challenges while achieving superior business results. We are committed to doing our part by operating ethically, working hard to reduce emissions from operations, investing in research and development, protecting our people and contributing to communities, rewarding our shareholders, and, as always, demanding further improvements in our performance. Our company has a long-standing commitment to corporate citizenship. The following pages provide an update on the efforts of our organization and its dedicated people in translating this commitment into tangible results.
I welcome any feedback you have on this report and look forward to reporting our progress to you next year and beyond.
Tim Hearn
Chairman, president and chief executive officer
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