Exhibit 99.1

Imperial Oil Limited
111 St Clair Avenue West
Toronto, Ontario
Canada M5W 1K3	News Release

Imperial Oil Reports Record Third-Quarter and Nine-Month Earnings

Toronto, October 21, 2004 — Imperial Oil Limited today announced net earnings for the third quarter of 2004 of $539 million or $1.52 a share. This compared with earnings of $375 million or $1.01 a share for the third quarter of 2003. Net earnings for the first nine months of 2004 were $1,502 million or $4.18 a share, versus $1,427 million or $3.81 a share for the first nine months of 2003. Both the third-quarter and nine-month earnings for 2004 are the highest in the company’s history.

Earnings in the third quarter reflect higher realizations from crude oil production and stronger industry margins in petroleum refining and petrochemicals operations, partly offset by lower margins in petroleum products marketing. A higher Canadian dollar had a negative impact on earnings of about $55 million in the third quarter versus the third quarter of 2003. Over the first three quarters of 2004, the negative earnings impact of the higher Canadian dollar compared with last year was about $200 million.

Imperial’s total revenues were $5,814 million in the third quarter and $16,347 million in the first nine months of 2004, compared with $4,626 million and $14,614 million in the corresponding periods of 2003. Capital and exploration expenditures were $354 million during the third quarter of 2004, and $1,004 million in the first nine months of 2004, versus $361 million and $1,105 million during the corresponding periods of last year. In the first nine months of 2004, Imperial repurchased more than nine million shares for $580 million. At September 30, 2004, the company’s cash balance was $933 million, compared with $448 million at the end of 2003.

Imperial’s chairman, president and chief executive officer Tim Hearn said that the company’s record quarterly and nine-month earnings reflected a combination of higher crude oil prices and continuing strong operating performance, including higher natural gas production and improved refinery utilization. “Regardless of short-term commodity prices, our focus remains on continually improving base operations while advancing major projects aimed at profitable growth in future production. Both of these will contribute to increased value for Imperial’s shareholders,” Hearn said.

Imperial is one of Canada’s largest corporations and has been a leading member of the country’s petroleum industry for almost 125 years. It is also the country’s largest refiner and marketer of petroleum products — sold primarily under the Esso and Mobil brands — with a coast-to-coast supply network that includes 2,100 retail outlets.

- 30 -

For further information:
Investor relations	Media relations
Susan Swan	Richard O’Farrell
(416) 968-4262	(416) 968-4875

Highlights

Main applications filed on Mackenzie Gas Project

On October 7, 2004 Imperial, on behalf of the Mackenzie Gas Project co-venturers, filed applications for the main regulatory approvals required for the project with the boards, panels and agencies responsible for assessing and regulating energy developments in the Northwest territories — a major milestone towards eventual approval of the project. If it proceeds, the project will include development of an estimated six trillion cubic feet (tcf) of natural gas resources in the three largest onshore fields discovered in the Mackenzie Delta — including 2.8 tcf at Imperial’s Taglu field — and construction of associated pipelines and facilities.

Solid oil and gas production

Imperial’s gross production of natural gas and natural gas liquids (NGLs) in the third quarter of 2004 were both higher than in the third quarter of 2003. Also, the company’s gross oil and gas production was more than four percent higher in the third quarter of 2004 than in the second quarter of this year.

Downstream operating performance strong

Imperial’s operating performance in both refining and chemicals was strong through the third quarter of 2004. Refinery utilization was 96 percent in the third quarter and 93 percent for the first nine months of 2004, versus 90 percent in the corresponding periods in 2003. Total refinery throughput was 76.6 million litres a day in the third quarter and 74.3 million litres a day over the first nine months, both higher than in 2003.

Strong safety performance continues

Imperial’s strong safety performance continued in 2004. The incidence of work-related injuries and illnesses for both employees and contractors through the first nine months of 2004 was better than in 2003. The company’s overall safety performance in 2003 was the best on record.

Corporate headquarters to move to Calgary in 2005

On September 29, 2004 the company announced that its corporate head office and the management of its products and chemicals division will be relocated from Toronto to Calgary. The move is expected to be completed by the end of August 2005.

IMPERIAL OIL LIMITED

FINANCIAL HIGHLIGHTS

							Nine months to
	Third quarter						September 30
	2004			2003			2004			2003
Earnings (millions of dollars)
Natural resources		411			257			1,098			947
Petroleum products		99			115			342			356
Chemicals		31			8			72			21
Corporate and other		(2	)		(5	)		(10	)		103
Net earnings		539			375			1,502			1,427
Cash flow from operating activities		1,100			485			2,142			1,857
Capital and exploration expenditures		354			361			1,004			1,105
Per-share information (dollars)
Net earnings - basic		1.52			1.01			4.19			3.81
Net earnings - diluted		1.52			1.01			4.18			3.81
Dividends		0.22			0.22			0.66			0.65
Share prices - close at September 30
Toronto Stock Exchange (Canadian dollars)								65.48			50.80
American Stock Exchange (U.S. dollars)								51.71			37.21

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OPERATING RESULTS
The company’s net earnings for the third quarter were $539 million or $1.52 a share on a diluted basis, compared with $375 million or $1.01 a share for the same quarter of 2003. Net earnings for the first nine months of 2004 were $1,502 million or $4.18 a share on a diluted basis, versus $1,427 million or $3.81 a share for the same period in 2003. Both the third quarter and nine-month earnings for 2004 are the best on record.

Earnings in the third quarter were positively impacted by higher realizations for crude oil, stronger refining and petrochemical margins, partly offset by significantly lower industry retail margins and lower production at Cold Lake due to the cyclic nature of the operation. The higher Canadian dollar continued to have a negative earnings impact of about $55 million versus the same quarter last year. The company’s operating performance remained solid through the third quarter of 2004.

For the first nine months, higher realizations for crude oil, stronger refining and petrochemical margins, and higher volumes of natural gas, Syncrude and petroleum products contributed positively to earnings, partly offset by lower marketing margins. Compared with the first nine months of 2003, these favourable operating results were partly offset by the combined negative effects of a higher Canadian dollar on resource and product prices of about $200 million, the absence of favourable foreign exchange effects on the company’s U.S.-dollar denominated debt of about $110 million, and lower benefits from tax matters of about $90 million.

Total revenues were $5,814 million in the third quarter and $16,347 million in the first nine months of 2004, versus $4,626 million and $14,614 million in the same periods last year.

IMPERIAL OIL LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued .....)

Natural resources
During the third quarter of 2004, net earnings from natural resources were a record $411 million compared with $257 million in the same period last year. Higher earnings were attributable to higher crude oil realizations and natural gas volumes, partly offset by the negative effect of a stronger Canadian dollar on resource prices and lower Cold Lake bitumen production. Net earnings for the first nine months, also the best on record, were $1,098 million versus $947 million during the same period last year. The positive earnings effects of improved realizations for crude oil combined with higher natural gas, Syncrude and natural gas liquids (NGLs) volumes in 2004 were partly offset by lower Cold Lake bitumen production, lower benefits from tax matters and the negative effects of a higher Canadian dollar.

While U.S.-dollar world oil prices have been trending upward since the beginning of the year, they rose sharply during the third quarter amid world geo-political supply concerns and a steady increase of world demand for crude oil. However, increases in the company’s Canadian dollar realizations for conventional crude oil and Cold Lake bitumen were dampened by the effects of a higher Canadian dollar. Brent crude oil prices in U.S. dollars averaged 46 percent higher in the third quarter and 27 percent higher in the first nine months, compared with the same periods last year. Realizations for the company’s conventional crude oil in the third quarter averaged 44 percent higher, and for the first nine months of the year 15 percent higher than the realizations of the same periods last year.

Cold Lake bitumen sales are priced in U.S. dollars and averaged 56 percent higher in the third quarter, and 22 percent higher during the first nine months of 2004 than that of the same periods in 2003. However, the effect of a stronger Canadian dollar has reduced these improvements to 47 percent and 13 percent respectively, when translated to Canadian dollars.

Realizations for natural gas averaged $6.57 a thousand cubic feet in the third quarter, compared with $6.12 a thousand cubic feet in the same quarter last year. For the first nine-month period, realizations for natural gas averaged $6.67 a thousand cubic feet in 2004, slightly down from $6.98 a thousand cubic feet in the same period of 2003.

Gross production of Cold Lake bitumen averaged 121 thousand barrels a day during the third quarter, down from 137 thousand barrels a day in the same quarter last year. For the first nine-month period, gross production was 120 thousand barrels a day this year, versus 132 thousand barrels a day in the same period of 2003. Lower production was due to the cyclic nature of production at Cold Lake.

The company’s share of Syncrude’s gross production was 61 thousand barrels a day in the third quarter unchanged from the same period a year ago. During the first nine-month period, the company’s share of gross production from Syncrude averaged 60 thousand barrels a day in 2004, up from 54 thousand barrels a day in the same period of 2003. Higher volumes were attributable to reduced turnaround activities in 2004.

In the third quarter of this year, gross production of conventional crude oil averaged 42 thousand barrels a day, compared with 45 thousand barrels a day during the same period in 2003. Production for the nine months averaged 44 thousand barrels a day, compared with 46 thousand barrels a day during the first three quarters of 2003. Natural reservoir decline in the Western Canadian Basin was the main reason for the reduced production.

IMPERIAL OIL LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued .....)

Gross production of NGLs available for sale was 33 thousand barrels a day in the third quarter, up from 28 thousand barrels a day in the same quarter last year. During the first nine months of 2004, gross production of NGLs available for sale averaged 33 thousand barrels a day, compared with 27 thousand barrels a day in the same period of 2003.

Gross production of natural gas during the third quarter of 2004 increased to 581 million cubic feet a day from 520 million cubic feet a day in the same period last year. During the first three quarters of the year, gross production was 566 million cubic feet a day, up from 499 million cubic feet a day in the first nine months of 2003.

The increased natural gas and NGLs volumes were mainly due to higher production from the Wizard Lake field in Alberta.

The Cree exploration well, offshore Nova Scotia, was abandoned in the third quarter without encountering natural gas in commercial quantities. The company’s 20 percent share of exploration costs related to the Cree well were reflected in third quarter earnings.

A 1,900-square-kilometer seismic acquisition program in the Orphan Basin on Canada’s East Coast was completed on schedule and budget. The company holds a twenty-five percent interest in eight deepwater exploration licenses in the Orphan Basin, offshore Newfoundland.

In October 2004, the company, on behalf of the Mackenzie Gas Project co-venturers, filed applications for the main regulatory approvals required for the project with the boards, panels and agencies responsible for assessing and regulating energy developments in the Northwest Territories.

Petroleum products
Net earnings from petroleum products were $99 million in the third quarter, down from $115 million in the same quarter of 2003. Nine-month net earnings were $342 million, slightly lower than a record net earnings of $356 million in the same period of 2003. Stronger international refining margins were insufficient to offset lower fuels marketing margins in both periods. Sales volumes of petroleum products were higher, due in part to higher industry demand.

Following the completion of the planned maintenance activities in the second quarter, throughput at the company’s refineries has increased. Refinery capacity utilization was 96 percent in the third quarter and averaged 93 percent during the first nine months of 2004, compared with 90 percent in the corresponding periods in 2003.

Chemicals
Net earnings from chemical operations were $31 million in the third quarter, up from $8 million in the same quarter last year due to improved polyethylene and other chemical product margins and increased sales. Nine-month net earnings were $72 million, compared with $21 million for the same period in 2003. Improved margins on sales of polyethylene and other chemical products contributed primarily to the increase.

IMPERIAL OIL LIMITED

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued .....)

Corporate and other
Net earnings from corporate and other operations were negative $2 million in the third quarter compared with negative $5 million in the same period of 2003. Nine-month net earnings were negative $10 million versus positive $103 million last year. Lower earnings were due to the absence of the favourable foreign exchange effects on the company’s U.S.-dollar-denominated debt, which was replaced with Canadian-dollar denominated debt in June and July of 2003.

On September 29, 2004, the company announced its intention to relocate its head office from Toronto, Ontario to Calgary, Alberta. Detailed planning is currently underway and completion of the move is expected by August 2005.

LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operating activities was $1,100 million during the third quarter of 2004, up from $485 million in the same period last year. For the first three quarters of 2004, cash flow from operating activities was $2,142 million, versus $1,857 million during the same period of 2003. The increased cash inflow was mainly due to the impact of higher commodity prices on working capital, timing of income tax payments and higher earnings.

Capital and exploration expenditures were $354 million in the third quarter, compared with $361 million during the same quarter of 2003, and $1,004 million in the first nine months of 2004, versus $1,105 million in the same period a year ago. For the resources segment, capital and exploration expenditures were used to invest in growth opportunities in the oilsands and Mackenzie gas. The petroleum products segment spent its capital expenditures mainly on projects to reduce the sulphur content of diesel fuel and to improve operating efficiency.

During the first nine months of 2004, the company repurchased more than nine million shares for $580 million. Under the current share-repurchase program, which began on June 23, 2004, the company has purchased about four million shares, and can purchase up to an additional 14 million shares before June 22, 2005 when the current program expires.

Cash dividends of $238 million were paid in the first nine months of 2004, compared with dividends of $241 million paid in the same period of 2003. Lower dividends paid were attributable to the effects of the company’s share-purchase program partly offset by the increase of per-share dividends since the third quarter of 2003.

The above factors led to an increase in the company’s balance of cash and marketable securities to $933 million at September 30, 2004, from $448 million at the end of 2003.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information about market risks for the nine months ended September 30, 2004 does not differ materially from that discussed on page 27 in the company’s annual report to shareholders for the year ended December 31, 2003 and interim reports to shareholders for the quarters ended March 31, 2004, and June 30, 2004.

This report may contain forward-looking information. Actual results could differ materially due to market conditions, changes in law or government policy, changes in operating conditions and costs, changes in project schedules, operating performance, demand for oil and gas, commercial negotiations or other technical and economic factors.

IMPERIAL OIL LIMITED

CONSOLIDATED STATEMENT OF EARNINGS
(unaudited)

					Nine months
	Third quarter				to September 30
millions of dollars	2004		2003		2004		2003
REVENUES
Operating revenues		5,771		4,602		16,266		14,526
Investment and other income (3)		43		24		81		88
TOTAL REVENUES		5,814		4,626		16,347		14,614
EXPENSES
Exploration		21		33		52		44
Purchases of crude oil and products		3,405		2,541		9,412		8,201
Operating (2) (4)		711		656		2,132		2,098
Selling and general (4)		299		308		896		921
Federal excise tax		328		328		946		942
Depreciation and depletion		220		185		652		542
Financing costs (6)		10		15		29		(99	)
TOTAL EXPENSES		4,994		4,066		14,119		12,649
EARNINGS BEFORE INCOME TAXES		820		560		2,228		1,965
INCOME TAXES		281		185		726		538
NET EARNINGS		539		375		1,502		1,427
PER-SHARE INFORMATION - dollars
Net earnings - basic (8)		1.52		1.01		4.19		3.81
Net earnings - diluted (8)		1.52		1.01		4.18		3.81
Dividends		0.22		0.22		0.66		0.65

CONSOLIDATED STATEMENT OF RETAINED EARNINGS
(unaudited)

							Nine months
	Third quarter						to September 30
millions of dollars	2004			2003			2004			2003
RETAINED EARNINGS AT BEGINNING OF PERIOD		4,392			3,890			3,919			3,277
Net earnings for the period		539			375			1,502			1,427
Share purchases (8)		(199	)		(187	)		(531	)		(464	)
Dividends		(78	)		(81	)		(236	)		(243	)
RETAINED EARNINGS AT END OF PERIOD		4,654			3,997			4,654			3,997

Certain figures for the prior year have been reclassified in the financial statements to conform with the current year’s presentation.

IMPERIAL OIL LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)

							Nine months
inflow/(outflow)	Third quarter						to September 30
millions of dollars	2004			2003			2004			2003
OPERATING ACTIVITIES
Net earnings		539			375			1,502			1,427
Depreciation and depletion		220			185			652			542
(Gain)/loss on asset sales, after tax		(15	)		—			(29	)		1
Future income taxes and other		(58	)		(5	)		(216	)		(247	)
Cash flow from earnings		686			555			1,909			1,723
Accounts receivable		(125	)		55			(308	)		75
Inventories and prepaids		(15	)		62			(217	)		(199	)
Income taxes payable		289			67			432			188
Accounts payable and other		265			(254	)		326			70
Change in operating assets and liabilities		414			(70	)		233			134
CASH FROM OPERATING ACTIVITIES		1,100			485			2,142			1,857
INVESTING ACTIVITIES
Additions to property, plant and equipment and intangibles		(340	)		(324	)		(942	)		(1,049	)
Proceeds from asset sales		28			16			94			38
CASH FROM (USED IN) INVESTING ACTIVITIES		(312	)		(308	)		(848	)		(1,011	)
FINANCING ACTIVITIES
Short-term debt - net		—			—			9			—
Long-term debt issued		—			272			—			818
Repayment of long-term debt		—			(272	)		(8	)		(818	)
Issuance of common shares under stock option plan (8)		1			—			8			—
Common shares purchased (8)		(217	)		(207	)		(580	)		(519	)
Dividends paid		(78	)		(82	)		(238	)		(241	)
CASH FROM (USED IN)
FINANCING ACTIVITIES		(294	)		(289	)		(809	)		(760	)
INCREASE (DECREASE) IN CASH		494			(112	)		485			86
CASH AT BEGINNING OF PERIOD		439			964			448			766
CASH AT END OF PERIOD		933			852			933			852

Certain figures for the prior year have been reclassified in the financial statements to conform with the current year’s presentation.

IMPERIAL OIL LIMITED

CONSOLIDATED BALANCE SHEET
(unaudited)

	As at		As at
	Sept.30		Dec.31
millions of dollars	2004		2003
ASSETS
Current assets
Cash		933		448
Accounts receivable		1,623		1,315
Inventories of crude oil and products		584		407
Materials, supplies and prepaid expenses		145		105
Future income tax assets		502		353
Total current assets		3,787		2,628
Investments and other long-term assets		253		259
Property, plant and equipment		9,480		9,218
Goodwill		204		204
Other intangible assets		51		52
TOTAL ASSETS		13,775		12,361
LIABILITIES
Current liabilities
Short-term debt		81		72
Accounts payable and accrued liabilities		2,503		2,222
Income taxes payable		1,028		595
Current portion of long-term debt		994		501
Total current liabilities		4,606		3,390
Long-term debt (7)		368		859
Other long-term obligations		1,020		972
Future income tax liabilities		1,309		1,362
TOTAL LIABILITIES		7,303		6,583
SHAREHOLDERS’ EQUITY		6,472		5,778
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		13,775		12,361

Certain figures for the prior year have been reclassified in the financial statements to conform with the current year’s presentation.

Approved by the directors October 21, 2004
/s/ T.J. Hearn	/s/ Paul A. Smith
Chairman, president and	Controller and
chief executive officer	senior vice-president,
	finance and administration

IMPERIAL OIL LIMITED

BUSINESS SEGMENTS (unaudited)

Third quarter	Resources				Products				Chemicals
millions of dollars	2004		2003		2004		2003		2004		2003
REVENUES
Operating revenues (a)		901		796		4,531		3,576		339		230
Intersegment sales (b)		801		552		389		288		76		55
Investment and other income		23		3		15		14		—		—
TOTAL REVENUES		1,725		1,351		4,935		3,878		415		285
EXPENSES
Exploration (c)		21		33		—		—		—		—
Purchases (b)		504		417		3,873		2,815		293		201
Operating (b)		405		377		261		244		46		38
Selling and general		7		7		268		272		24		29
Federal excise tax		—		—		328		328		—		—
Depreciation and depletion		159		129		58		51		3		5
Financing costs		—		—		1		1		—		—
TOTAL EXPENSES		1,096		963		4,789		3,711		366		273
EARNINGS BEFORE INCOME TAXES		629		388		146		167		49		12
INCOME TAXES		218		131		47		52		18		4
NET EARNINGS		411		257		99		115		31		8
EXPORT SALES TO THE UNITED STATES		310		337		259		185		184		134
CASH FLOW FROM EARNINGS		537		364		117		186		34		13
CAPEX (c)		286		250		65		102		3		9

Third quarter	Corporate						Consolidated
millions of dollars	2004			2003			2004		2003
REVENUES
Operating revenues (a)		—			—			5,771		4,602
Intersegment sales (b)		—			—			—		—
Investment and other income		5			7			43		24
TOTAL REVENUES		5			7			5,814		4,626
EXPENSES
Exploration (c)		—			—			21		33
Purchases (b)		—			—			3,405		2,541
Operating (b)		—			—			711		656
Selling and general		—			—			299		308
Federal excise tax		—			—			328		328
Depreciation and depletion		—			—			220		185
Financing costs		9			14			10		15
TOTAL EXPENSES		9			14			4,994		4,066
EARNINGS BEFORE INCOME TAXES		(4	)		(7	)		820		560
INCOME TAXES		(2	)		(2	)		281		185
NET EARNINGS		(2	)		(5	)		539		375
EXPORT SALES TO THE UNITED STATES		—			—			753		656
CASH FLOW FROM EARNINGS		(2	)		(8	)		686		555
CAPEX (c)		—			—			354		361

(a)	Includes crude sales made by Products in order to optimize refining operations.
(b)	Consolidated amounts exclude intersegment transactions, as follows:

	2004		2003
Purchases		1,265		892
Operating expenses		1		3
Total intersegment sales		1,266		895

(c) Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant, equipment and intangibles and additions to capital leases.

IMPERIAL OIL LIMITED

BUSINESS SEGMENTS (unaudited)

Nine months to September 30	Resources				Products				Chemicals
millions of dollars	2004		2003		2004		2003		2004		2003
REVENUES
Operating revenues (a)		2,646		2,592		12,719		11,177		901		757
Intersegment sales (b)		2,132		1,760		1,165		993		214		182
Investment and other income		41		34		30		33		—		—
TOTAL REVENUES		4,819		4,386		13,914		12,203		1,115		939
EXPENSES
Exploration (c)		52		44		—		—		—		—
Purchases (b)		1,472		1,459		10,664		8,980		786		687
Operating (b)		1,190		1,210		805		782		138		116
Selling and general		17		16		809		818		70		87
Federal excise tax		—		—		946		942		—		—
Depreciation and depletion		468		370		175		154		9		18
Financing costs		—		1		2		1		—		—
TOTAL EXPENSES		3,199		3,100		13,401		11,677		1,003		908
EARNINGS BEFORE INCOME TAXES		1,620		1,286		513		526		112		31
INCOME TAXES		522		339		171		170		40		10
NET EARNINGS		1,098		947		342		356		72		21
EXPORT SALES TO THE UNITED STATES		977		994		734		591		507		429
CASH FLOW FROM EARNINGS		1,470		1,175		371		541		77		30
CAPEX (c)		810		709		183		366		11		30
TOTAL ASSETS AS AT Sept.30 (b)		6,855		6,212		5,899		5,361		511		415
CAPITAL EMPLOYED AS AT Sept.30		3,998		3,562		2,795		2,707		230		193

Nine months to September 30	Corporate						Consolidated
millions of dollars	2004			2003			2004		2003
REVENUES
Operating revenues (a)		—			—			16,266		14,526
Intersegment sales (b)		—			—			—		—
Investment and other income		10			21			81		88
TOTAL REVENUES		10			21			16,347		14,614
EXPENSES
Exploration (c)		—			—			52		44
Purchases (b)		—			—			9,412		8,201
Operating (b)		—			—			2,132		2,098
Selling and general		—			—			896		921
Federal excise tax		—			—			946		942
Depreciation and depletion		—			—			652		542
Financing costs		27			(101	)		29		(99	)
TOTAL EXPENSES		27			(101	)		14,119		12,649
EARNINGS BEFORE INCOME TAXES		(17	)		122			2,228		1,965
INCOME TAXES		(7	)		19			726		538
NET EARNINGS		(10	)		103			1,502		1,427
EXPORT SALES TO THE UNITED STATES		—			—			2,218		2,014
CASH FLOW FROM EARNINGS		(9	)		(23	)		1,909		1,723
CAPEX (c)		—			—			1,004		1,105
TOTAL ASSETS AS AT Sept.30 (b)		933			852			13,775		12,549
CAPITAL EMPLOYED AS AT Sept.30		933			899			7,956		7,361

(a)	Includes crude sales made by Products in order to optimize refining operations.
(b)	Consolidated amounts exclude intersegment transactions, as follows:

	2004		2003
Purchases		3,510		2,925
Operating expenses		1		10
Total intersegment sales		3,511		2,935
Intersegment receivables and payables		423		291

(c) Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant, equipment and intangibles and additions to capital leases.

IMPERIAL OIL LIMITED

OPERATING STATISTICS
(unaudited)

					Nine months
	Third quarter				to September 30
	2004		2003		2004		2003
GROSS CRUDE OIL AND NGL PRODUCTION
(thousands of barrels a day)
Conventional		42		45		44		46
Cold Lake		121		137		120		132
Syncrude		61		61		60		54
Total crude oil production		224		243		224		232
Natural gas liquids (NGLs) available for sale		33		28		33		27
Total crude oil and NGL production		257		271		257		259
NET CRUDE OIL AND NGL PRODUCTION
(thousands of barrels a day)
Conventional		32		35		33		35
Cold Lake		101		121		106		116
Syncrude		60		60		60		53
Total crude oil production		193		216		199		204
Natural gas liquids (NGLs) available for sale		26		23		27		21
Total crude oil and NGL production		219		239		226		225
COLD LAKE BLEND SALES (thousands of barrels a day)		153		177		158		173
NGL SALES (thousands of barrels a day)		37		29		39		35
NATURAL GAS
(millions of cubic feet a day)
Production (gross)		581		520		566		499
Production (net)		533		467		517		441
Production available for sale (gross)		501		461		495		432
Production available for sale (net)		454		408		446		374
Sales		521		475		514		453
AVERAGE PRICES (dollars)
Conventional crude oil sales (a barrel)		52.86		36.68		47.59		41.32
Par crude oil price at Edmonton (a barrel)		56.99		41.53		51.69		45.19
Heavy crude oil at Hardisty (Bow River, a barrel)		42.36		31.16		38.51		34.36
NGL sales (a barrel)		34.47		28.25		31.91		33.44
Natural gas sales (a thousand cubic feet)		6.57		6.12		6.67		6.98
PETROLEUM PRODUCTS SALES
(millions of litres a day)
Gasolines		34.3		34.2		33.1		33.1
Heating, diesel and jet fuels		26.7		24.7		27.0		26.2
Heavy fuel oils		5.7		5.2		5.7		4.9
Lube oils and other products		8.8		6.8		6.9		5.7
Net petroleum products sales		75.5		70.9		72.7		69.9
Sales under purchase and sale agreements		13.2		13.8		13.7		14.4
Total petroleum products sales		88.7		84.7		86.4		84.3
TOTAL REFINERY THROUGHPUT (millions of litres a day)		76.6		71.7		74.3		71.9
REFINERY CAPACITY UTILIZATION (percent)		96		90		93		90
PETROCHEMICAL SALES (thousands of tonnes a day)		3.3		3.1		3.3		3.3

IMPERIAL OIL LIMITED

SHARE OWNERSHIP, TRADING AND PERFORMANCE
(unaudited)

					Nine months
	Third quarter				to September 30
	2004		2003		2004		2003
RETURN ON AVERAGE CAPITAL EMPLOYED (a)
(rolling 4 quarters, percent)						23.4		26.7
RETURN ON AVERAGE SHAREHOLDERS’ EQUITY
(rolling 4 quarters, percent)						28.6		33.6
INTEREST COVERAGE RATIO - EARNINGS BASIS
(rolling 4 quarters, times covered)						71.9		70.8
SHARE OWNERSHIP
Outstanding shares (thousands)
Monthly weighted average		355,398		370,459		358,623		374,168
At September 30						353,380		367,921
Number of shareholders
At September 30						15,116		15,634
SHARE PRICES
Toronto Stock Exchange (Canadian dollars)
High		66.76		53.49		66.76		53.49
Low		59.50		45.62		56.42		43.20
Close at September 30						65.48		50.80
American Stock Exchange (U.S. dollars)
High		52.22		38.79		52.22		38.79
Low		45.50		33.04		42.34		28.25
Close at September 30						51.71		37.21

(a) Return on capital employed is the rolling four quarters’ net earnings excluding the after-tax cost of financing divided by the average rolling four quarters’ capital employed.

IMPERIAL OIL LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. Accounting principles

These consolidated financial statements follow the same accounting policies and methods of computation as, and should be read in conjunction with, the most recent annual consolidated financial statements.

2. Reporting of fuel consumed in operations

Beginning in 2004, fuel consumed in operations, previously included in purchases of crude oil and products, is reclassified as operating expenses in the consolidated statement of earnings. Prior period amounts have been reclassified for comparative purposes. This reclassification has no impact on total expenses and net earnings or on the cash flow profile of the company.

3. Divestments

Investment and other income includes gains and losses on asset sales as follows:

					Nine months
	Third quarter				to September 30
millions of dollars	2004		2003		2004		2003
Proceeds from asset sales		28		16		94		38
Book value of assets sold (a)		7		14		54		37
Gain/(loss) on asset sales, before tax (b)		21		2		40		1
Gain/(loss) on asset sales, after tax (b)		15		2		29		1

(a)	Assets sold did not include cash.
(b)	Third quarter 2004 included a gain of $16 million ($10 million after incometaxes) from the sale of the company’s Golden Spike Shallow producing property.

4. Employee retirement benefits

The components of net benefit cost included in total expenses in the consolidated statement of earnings are as follows:

							Nine months
	Third quarter						to September 30
millions of dollars	2004			2003			2004			2003
Pension benefits:
Current service cost		19			18			58			54
Interest cost		59			55			177			165
Expected return on plan assets		(56	)		(45	)		(168	)		(135	)
Amortization of prior service cost		7			6			21			19
Recognized actuarial loss		17			17			51			51
Net benefit cost		46			51			139			154
Other post-retirement benefits:
Current service cost		2			1			5			4
Interest cost		6			6			18			17
Recognized actuarial loss		1			1			3			2
Net benefit cost		9			8			26			23

IMPERIAL OIL LIMITED

5. Incentive compensation programs

The company accounts for its incentive compensation programs, except for the incentive stock option plan issued prior to January 1, 2003, by using the fair-value-based method. Under this method, compensation expense related to the units of these programs is recorded in the consolidated statement of earnings over the vesting period. The company accounts for its incentive stock option plan by using the intrinsic-value-based method and does not recognize compensation expense on the issuance of stock options because the exercise price is equal to the market value at the date of grant. If the fair-value-based method of accounting had been adopted to account for the incentive stock option plan, the impact on net earnings and earnings per share would have been negligible.

The company purchased shares on the market to fully offset the dilutive effects from the exercise of incentive stock options. The company does not plan to issue stock options in the future.

6. Financing costs

					Nine months
	Third quarter				to September 30
millions of dollars	2004		2003		2004		2003
Debt related interest		9		11		26		27
Other interest		1		1		3		3
Total interest expense		10		12		29		30
Foreign exchange expense (gain) on long-term debt		—		3		—		(129	)
Total financing costs		10		15		29		(99	)

7. Long-term debt

			As at		As at
		Interest	Sept.30		Dec.31
Issued	Maturity date	rate	2004		2003
2003	$250 million due May 26, 2005 and
	$250 million due August 26, 2005 (a)	Variable		—		500
2003	January 19, 2006	Variable		318		318
Long-term debt				318		818
Capital leases				50		41
Total long-term debt				368		859

(a) The portion of variable-rate loan from Exxon Overseas Corporation of $250 million due on August 26, 2005 has been reclassified to the current portion of long-term debt in the balance sheet.

IMPERIAL OIL LIMITED

8. Common shares

	As at		As at
	Sep. 30		Dec. 31
thousands of shares	2004		2003
Authorized		450,000		450,000
Common shares outstanding		353,380		362,653

In 1995 through 2003, the company purchased shares under nine 12-month normal course share purchase programs, as well as an auction tender. On June 23, 2004, another 12-month normal course program was implemented with an allowable purchase of up to 17.9 million shares (five percent of the total on June 21, 2004), less any shares purchased by the employee savings plan and company pension fund. The results of these activities are as shown below:

	millions of
Year	Shares		Dollars
1995 - 2002		202.7		5,169
2003 - Third quarter		4.2		207
Full year		16.3		799
2004 - Third quarter		3.5		217
Year-to-date		9.5		580
Cumulative purchases to date		228.5		6,548

Exxon Mobil Corporation’s participation in the above maintained its ownership interest in Imperial at 69.6 percent.

The excess of the purchase cost over the stated value of shares purchased has been recorded as a distribution of retained earnings.

The following table provides the calculation of basic and diluted earnings per share:

					Nine months
	Third quarter				to September 30
	2004		2003		2004		2003
Net earnings (millions of dollars)		539		375		1,502		1,427
(thousands of shares)
Average number of common shares outstanding, weighted monthly		355,398		370,459		358,623		374,168
Plus: average number of shares issued on assumed exercise of stock options and restricted stock units		808		—		750		—
Weighted average number of diluted common shares		356,206		370,459		359,373		374,168
Earnings per share - basic (dollars)		1.52		1.01		4.19		3.81
Earnings per share - diluted (dollars)		1.52		1.01		4.18		3.81