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CALGARY HERALD: Canada’s biggest oil companies pump out another record year in profits

LISA SCHMIDT

Canada’s biggest oil companies have pumped out another record year in profits, taking in a total of $12.1 billion in 2006 to put the sector into the double digits for the first time.

Driven by soaring oil prices, the combined earnings for Canada’s integrated companies — which both explore for and refine oil and gas— were 25 per cent ahead of 2005 and up nearly 70 per cent from only twoyears ago.

Husky Energy Inc., the last of the Calgary-based integrated companies to report annual earnings for 2006, on Monday said its profits rose to $2.7 billion, topping a record $2 billion in profits the previous year.

It follows record profits at Imperial Oil Ltd. and Suncor Energy Inc., which both chalked up $3 billion in profits last year. Petro-Canada and Shell Canada Inc. earned less than the previous year but still churned out a very healthy $1.7 billion.

The question now is whether the industry — wrestling with rising costs and lower prices for oil and gas — can follow up 2006 with yet another round of record-breaking numbers.

“Is there more yet to come? Most likely,” said Martin Molyneaux, an analyst with FirstEnergy Capital Corp. in Calgary.

“The real key to this whole thing is how much of all of these company’s cash flow are they going to redeploy into generating more oil. That’s the only thing that’s going to drop oil prices is increasing supply.”

The Canadian profits are still a only fraction of those in the U.S., where the latest round of record earnings have sparked more backlash from critics calling for higher taxes on the sector.

The three largest U.S. energy companies — ExxonMobil Corp., Chevron Corp. and ConocoPhillips — together produced a fourth-quarter profit of $72 billion.

ExxonMobil notched a new high for corporate profit, taking in nearly $40 billion in 2006, a 10 per cent jump from a record in 2005.

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