##### 



(IMPERIAL OIL NEWS RELEASE LETTERHEAD)

Imperial Oil reports near-record first-quarter earnings

Toronto, April 21, 2004 Imperial Oil Limited today announced net earnings for
the first quarter of 2004 of $509 million or $1.40 a share, slightly below the
companys record earnings of $538 million or $1.42 a share in the first quarter
of 2003.

Favorable market conditions that prevailed through most of 2003, including high
international prices for crude oil and natural gas and strong manufacturing
margins for petroleum and petrochemicals, continued through the first quarter
of 2004. The companys crude oil and natural gas production volumes were also
higher than in the corresponding period of 2003.

However, these positive factors were more than offset by the negative effects
of a higher Canadian dollar. Because petroleum markets are based on U.S. dollar
prices, a rising Canadian dollar results in lower revenues. On average, the
Canadian-to-U.S. dollar exchange rate was 15 percent higher than in the first
quarter of 2003.

Total revenues for the quarter were $5,067 million, versus $5,478 million in
the first quarter of 2003. Capital and exploration expenditures were $345
million, compared with $355 in the corresponding quarter of 2003.

During the quarter the company repurchased 2.5 million shares for $147 million.
The balance of cash and marketable securities at March 31, 2004 was $311
million, from $448 million at the end of 2003.

In spite of the negative revenue impacts of a higher Canadian dollar, earnings
in the first quarter were close to those of last year, due to stronger
operating performance, said Imperials chairman, president and chief executive
officer Tim Hearn. We achieved real improvement in the controllable parts of
the business, such as production volumes, operating reliability and cost
management, and made solid progress on major projects to provide future
growth.

At the companys annual meeting today, Mr. Hearn told shareholders that
Imperial intends to remain in the forefront of future oil and gas development
in Canada. With our resource base, financial strength, technical capabilities
and portfolio of high-potential investments in Canadas major opportunity
areas, we are well positioned for long-term growth in shareholder value, he
said.

Imperial Oil is one of the largest producers of crude oil and natural gas
liquids in Canada, a major producer of natural gas, the largest refiner and
marketer of petroleum products  sold primarily under the Esso brand name  and
a major producer of petrochemicals.

- 30 -

|                         |  |                  
|------------------------ |  | -----------------
|For further information: |  |                  
|Investor relations       |  | Media relations  
|Jean Côté                |  | Richard OFarrell
|(416) 968-4262           |  | (416) 968-4875   





---



##### 



(IMPERIAL OIL HEADER)

Highlights

Cogeneration facility completed at Sarnia

Installation of a clean and efficient, 95-megawatt cogeneration facility was
completed at Imperials Sarnia, Ontario manufacturing plant  ahead of schedule
under budget, and with an outstanding safety record. Cogeneration, which uses
natural gas to generate electricity and steam simultaneously, is almost twice
as efficient as generating electricity and steam separately and also
significantly reduces emissions of greenhouse gases and smog-forming compounds.
Greenhouse-gas reductions from cogeneration at Imperials Sarnia and Cold Lake
operations are roughly equivalent to planting more than 1.5 million trees a
year.

Approval received for further Cold Lake expansion

Alberta government approval was received for a further three-phase (phases
14-16) expansion of Imperials Cold Lake bitumen-producing operation, as well
as extension into a new area to maintain production from the existing phases
9-10. This approval is a significant, positive step in the development of Cold
Lake. Further engineering assessments, market analysis and an examination of
the business outlook will be performed prior to making a final decision to
proceed with the project.

Upstream production volumes increase

Imperials production of crude oil, bitumen, natural gas liquids and natural
gas was higher in the first quarter of 2004 than in the corresponding quarter
of 2003. Production of crude oil and gas liquids was up by almost 10 percent,
and natural gas production up by almost 20 percent.

Refineries operate at higher capacity

All four of Imperials refineries  Dartmouth, Sarnia, Nanticoke and Strathcona
 operated at higher capacity and with excellent reliability through the first
quarter of 2004. Average refinery throughput was almost six percent higher than
in the first quarter of 2003 and was the highest first quarter of the past 10
years for these refineries.

Estimated costs of completing Syncrude expansion revised upward

Syncrude is engaged in an expansion project which will increase production over
40 percent to over 350,000 barrels a day. In March, Syncrude Canada Ltd.
advised its owners that estimated costs of completing the Stage 3 expansion
project have increased from $5.7 billion to $7.8 billion. Imperial holds a
25-percent interest in the Syncrude joint venture. The cost increases are
related to an expansion of the upgrader, which is currently underway. Start-up
of the expanded upgrader has also been delayed to mid-2006, a year later than
previously forecast. Imperial is adding project resources to support Syncrude
in order to move the project forward to successful completion.





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##### 



IMPERIAL OIL LIMITED

FINANCIAL HIGHLIGHTS

|                                     |                                           |  |              |       |      |  |     |       | 
|------------------------------------ | ----------------------------------------- |  | ------------ | ----- | ---- |  | --- | ----- | 
|                                     |                                           |  | Three months
|                                     |                                           |  | to March 31 
|                                     |                                           |  |             
|                                     |                                           |  | 2004         |       | 2003
|                                     |                                           |  |              |       |     
|Earnings (million of dollars)        |                                           |  |              |       |      |  |     |      
|                                     | Natural resources                         |  |              | 366   |      |  |     | 339   | 
|                                     | Petroleum products                        |  |              | 135   |      |  |     | 139   | 
|                                     | Chemicals                                 |  |              | 12    |      |  |     | 6     | 
|                                     | Corporate and other                       |  |              | (4    | )    |  |     | 54    | 
|                                     |                                           |  |              |       |      |  |     |      
|Net earnings                         |                                           |  | 509          |       |      |  | 538 |      
|                                     |                                           |  |              |       |      |  |     |      
|Cash flow from operating activities  |                                           |  | 390          |       |      |  | 700 |      
|Capital and exploration expenditures |                                           |  | 345          |       |      |  | 355 |      
|Per-share information (dollars)      |                                           |  |              |       |      |  |     |      
|                                     | Net earnings  basic                      |  |              | 1.41  |      |  |     | 1.42  | 
|                                     | Net earnings  diluted                    |  |              | 1.40  |      |  |     | 1.42  | 
|                                     | Dividends                                 |  |              | 0.22  |      |  |     | 0.21  | 
|                                     | Share prices  close at March 31          |  |              |       |      |  |     |       | 
|                                     | Toronto Stock Exchange (Canadian dollars) |  |              | 58.87 |      |  |     | 47.35 | 
|                                     | American Stock Exchange (U.S. dollars)    |  |              | 44.84 |      |  |     | 32.14 | 

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

OPERATING RESULTS

The companys net earnings for the first quarter of 2004 were $509 million or
$1.40 a share on a diluted basis, versus $538 million or $1.42 a share for the
same period last year. Earnings in the first quarter of 2004 were positively
impacted by higher volumes of crude oil and natural gas, lower effective tax
rates in the resources segment and stronger manufacturing margins for petroleum
and chemical products. These increases were more than offset by the negative
earnings effects of a higher Canadian dollar of about $100 million, and the
absence of foreign exchange gains of about $50 million on U.S.-dollar
denominated debt reported in the first quarter of 2003. The company replaced
all its U.S.-dollar denominated debt with Canadian-dollar denominated debt
during 2003.

Total revenues were $5,067 million in the first quarter versus $5,478 million
in the corresponding period last year.

Natural resources

During the first quarter of 2004, net earnings from natural resources were $366
million, the second highest quarterly earnings on record, compared with $339
million in the same period last year. Earnings increased because of higher
production from the companys interest in Syncrude, higher natural gas volumes
and lower royalties, partly offset by lower realizations for crude oil and
natural gas mainly due to the negative effects of a higher Canadian dollar.
Lower effective tax rates from substantively enacted Alberta tax laws also
contributed about $45 million to earnings, which was partly offset by the
absence of a favourable tax settlement of about $20 million in the first
quarter of 2003.





---



##### 



IMPERIAL OIL LIMITED

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

While U.S. dollar world oil prices averaged slightly higher in the first
quarter, the companys Canadian dollar realizations for conventional crude oil
at $42.70 a barrel, compared with $47.86 a barrel in the same period last year,
were lower due to the stronger Canadian dollar. Average realizations for Cold
Lake bitumen in the first quarter of 2004 were about 15 percent lower than the
prior years prices. The companys realization for natural gas was also lower,
averaging $6.58 a thousand cubic feet in the first quarter of 2004, compared
with $8.12 a thousand cubic feet during the same period last year.

In the first quarter, total gross production of crude oil and natural gas
liquids (NGLs) increased to 263 thousand barrels a day from 241 thousand
barrels a day in the same period last year. Net production was 236 thousand
barrels a day, up from 210 thousand barrels a day in the first quarter of 2003.

Gross production of Cold Lake bitumen was 121 thousand barrels a day during the
first quarter of 2004, compared with 120 thousand barrels a day in the first
quarter of 2003. Net production increased to 112 thousand barrels a day from
106 thousand barrels a day during the same period a year ago. The higher net
bitumen production was a result of lower royalties from lower bitumen prices.

The companys share of Syncrudes gross production increased to 63 thousand
barrels a day from 47 thousand barrels a day in the first quarter of 2004. Net
production was 62 thousand barrels a day, up from 47 thousand barrels a day
during the same period last year. Higher volume was attributable to reduced
maintenance activities.

During the first three months this year, gross production of conventional crude
oil averaged 44 thousand barrels a day versus 47 thousand barrels a day in the
first quarter of 2003. Net production decreased slightly to 34 thousand barrels
a day from 36 thousand barrels a day during the same period last year. Natural
reservoir decline in the Western Canadian Basin was the main reason for the
reduced production.

Gross production of NGLs available for sale increased to 35 thousand barrels a
day in the first quarter of 2004 from 27 thousand barrels a day last year. Net
production was 28 thousand barrels a day in the first quarter, up from 21
thousand barrels a day in the first three months of 2003.

Gross production of natural gas during the first quarter of 2004 increased to
581 million cubic feet a day from 487 million cubic feet a day in the first
quarter last year. Net production increased to 522 million cubic feet a day
from 429 million cubic feet a day during the same period in 2003. The increased
natural gas and NGLs volumes were mainly due to higher production from the new
facilities at Wizard Lake in Alberta, which were completed in the third quarter
of 2003.

In February this year, the company, on behalf of the Mackenzie Gas Project
participants, resumed geotechnical fieldwork. The program consists primarily of
soil analysis and geotechnical surveys needed to help determine the optimal
location of the Mackenzie Valley pipeline, including associated facilities, and
support the development of regulatory applications and preliminary engineering
for the proposed project.





---



##### 



IMPERIAL OIL LIMITED

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

In March this year, the company, along with the other owners of Syncrude Canada
Ltd., was advised of a revised cost and schedule outlook for the Stage 3
expansion of the Syncrude oil-sands mining operation, located near Fort
McMurray, Alberta. Total project costs for the Stage 3 expansion are now
estimated to be about $7.8 billion, compared with the previous estimate
conducted in 2002 which suggested a total cost of $5.7 billion. Start-up of the
upgrader expansion, the main component of the project, is now targeted to occur
in mid-2006, later than the planned mid-2005 date.

The Government of Alberta approved the companys proposed expansion at Cold
Lake in March this year. The proposed expansion includes the development of
phases 14 - 16 which could produce up to 30 thousand barrels a day of
additional bitumen and an extension of phases 9 and 10 to maintain production
from these two phases. Specific development decisions will be made based on the
results of further engineering assessments, ongoing market analysis and
business conditions.

The winter drilling program to delineate bitumen for the proposed Kearl
oil-sands project was concluded in March. Since the start of drilling in
December 2003, 191 corehole wells have been completed. The information from
these wells, along with future corehole drilling, will be utilized in support
of a possible regulatory filing for the project in 2005.

Petroleum products

The net earnings from petroleum products were $135 million in the first quarter
of 2004, compared with $139 million during the same period a year ago. Earnings
were essentially flat, reflecting strong refining margins from improved
refinery utilization offset by the unfavourable impact of a higher Canadian
dollar and weak retail margins.

In March this year, the new 95-megawatt cogeneration facility was completed at
the companys Sarnia, Ontario manufacturing plant, ahead of schedule and under
budget. Safety performance was excellent during construction of the project.
The cogeneration facility will improve energy efficiency and reduce emissions
at the companys Sarnia-based petroleum product and chemical operations.

Chemicals

Net earnings in the first quarter of 2004 from chemical operations were $12
million, compared with $6 million during the same period last year. Earnings
increased mainly because of higher margins for polyethylene as a result of
lower feedstock costs and higher realizations, partly offset by lower sales
volume and a higher Canadian dollar.

Corporate and other

Net earnings from corporate and other operations were negative $4 million in
the first quarter of 2004, compared with positive $54 million in the same
period last year. Earnings decreased mainly due to the absence of favourable
foreign-exchange effects on U.S.-dollar denominated debt. The company replaced
all its U.S.-dollar denominated debt with Canadian-dollar denominated debt in
2003.





---



##### 



IMPERIAL OIL LIMITED

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

LIQUIDITY AND CAPITAL RESOURCES

Cash flow from operating activities was $390 million during the first quarter
of 2004, compared with $700 million in the same period last year. The decrease
in cash inflow was mainly due to seasonal inventory builds and the timing of
scheduled income tax payments.

During the first quarter of 2004, total investing activities used $306 million
of cash, compared with $340 million used in the same quarter last year. Capital
and exploration expenditures were $345 million in the first quarter, compared
with $355 million during the corresponding period in 2003. For the resources
segment, additional capital and exploration expenditures were used mainly at
Syncrude to maintain and expand production capacity. Capital expenditures for
the products segment were lower on completion of the project to reduce sulphur
content in gasoline.

During the first quarter, the company continued its share repurchase program
and bought 2.5 million shares for $147 million under a normal course issuer bid
that began on June 23, 2003, which has an allowable maximum purchase of 18.6
million shares. The maximum number of shares that may yet be purchased under
the current program is about six million.

Total cash dividends of $80 million were paid in the first quarter of 2004,
compared with $79 million paid in the same period last year. Dividends paid in
the first quarter were $0.22 a share versus $0.21 a share in the same quarter
last year.

The above factors led to a decrease in the companys balance of cash and
marketable securities to $311 million at March 31, 2004, from $448 million at
the end of 2003.

Reporting investments in mineral interests in oil and gas properties

The accounting standards for business combinations and goodwill and other
intangible assets issued by the Canadian Institute of Chartered Accountants
became effective for the company on July 1, 2001 and January 1, 2002,
respectively. These Canadian standards are harmonized with specific U.S.
standards in these areas. The Emerging Issues Task Force (EITF) of the U.S.
Financial Accounting Standards Board (FASB) was considering the issue of
whether the U.S. standards require interests held under oil, gas and mineral
leases to be separately classified as intangible assets in the balance sheet of
companies in the extractive industries.

In March 2004, the EITF reached a consensus that mineral rights are tangible
assets and the FASB is expected to finalize its position on the issue in the
near term.

Historically, in accordance with Canadian generally accepted accounting
principles (GAAP), the company has capitalized the cost of oil and gas
leasehold interests and reported these assets as part of tangible oil and gas
property, plant and equipment. If these assets were classified as intangible
assets, the amount that is subject to reclassification as of March 31, 2004
would be $868 million and $935 million as of December 31, 2003. The companys
results of operations would not be affected since these leasehold costs would
continue to be amortized in accordance with GAAP, whether they are classified
as tangible or intangible assets.





---



##### 



IMPERIAL OIL LIMITED

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information about market risks for the three months ended March 31, 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, except for the
following sensitivity:

|                                                        |  |  |           | 
|------------------------------------------------------- |  |  | --------- | 
|Earnings
sensitivity(a)                                
|millions of dollars after tax                          
|                                                        |  | 
|Four dollars (U.S.) a barrel change in crude oil prices |  |  | + (-) 230 | 

The sensitivity to changes in crude oil prices increased from 2003 year-end by
about $10 million (after tax) for each one U.S.-dollar difference due primarily
to lower royalties at Syncrude brought about by the capital investment level.



---

|(a) |  | The amount quoted to illustrate the impact of the sensitivity represents a
change of about 10 percent in the value of the commodity at the end of the
first quarter 2004. The sensitivity calculation shows the impact on annual
earnings that results from a change in one factor, after tax and royalties and
holding all other factors constant. While the sensitivity is applicable under
current conditions, it may not apply proportionately to larger fluctuations.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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)                        |                                         | Three months
|                                   |                                         | to March 31 
|                                   |                                         |              |      
|millions of dollars                |                                         | 2004         |       | 2003 
|                                   |                                         |              |       |      
|REVENUES                           |                                         |              |       |       |  |  |       |      
|                                   | Operating revenues                      |              |       | 5,056 |  |  |       | 5,452 |  
|                                   | Investment and other income             |              |       | 11    |  |  |       | 26    |  
|                                   |                                         |              |       |       | 
|TOTAL REVENUES                     |                                         |              | 5,067 |       |  |  | 5,478 |      
|                                   |                                         |              |       |       | 
|EXPENSES                           |                                         |              |       |       |  |  |       |      
|                                   | Exploration                             |              |       | 16    |  |  |       | 7     |  
|                                   | Purchases of crude oil and products (2) |              |       | 2,833 |  |  |       | 3,196 |  
|                                   | Operating (2)(3)                        |              |       | 683   |  |  |       | 739   |  
|                                   | Selling and general (3)                 |              |       | 293   |  |  |       | 321   |  
|                                   | Federal excise tax                      |              |       | 304   |  |  |       | 302   |  
|                                   | Depreciation and depletion              |              |       | 215   |  |  |       | 180   |  
|                                   | Financing costs (5)                     |              |       | 10    |  |  |       | (57   | )
|                                   |                                         |              |       |       | 
|TOTAL EXPENSES                     |                                         |              | 4,354 |       |  |  | 4,688 |      
|                                   |                                         |              |       |       | 
|EARNINGS BEFORE INCOME TAXES       |                                         |              | 713   |       |  |  | 790   |      
|INCOME TAXES                       |                                         |              | 204   |       |  |  | 252   |      
|                                   |                                         |              |       |       | 
|NET EARNINGS                       |                                         |              | 509   |       |  |  | 538   |      
|                                   |                                         |              |       |       | 
|PER-SHARE INFORMATION  dollars    |                                         |              |       |       |  |  |       |      
|                                   | Net earnings  basic (6)                |              |       | 1.41  |  |  |       | 1.42  |  
|                                   | Net earnings  diluted (6)              |              |       | 1.40  |  |  |       | 1.42  |  
|                                   | Dividends                               |              |       | 0.22  |  |  |       | 0.21  |  

|                                            |                             |              |       |      |   |  |       |      |  
|------------------------------------------- | --------------------------- | ------------ | ----- | ---- | - |  | ----- | ---- | -
|CONSOLIDATED STATEMENT OF RETAINED EARNINGS |                             |              |       |      |   |  |       |     
|(unaudited)                                 |                             | Three months
|                                            |                             | to March 31 
|                                            |                             |              |      
|millions of dollars                         |                             | 2004         |       | 2003
|                                            |                             |              |       |     
|RETAINED EARNINGS AT BEGINNING
OF PERIOD    |                             |              | 3,919 |      |   |  | 3,277 |     
|                                            | Net earnings for the period |              |       | 509  |   |  |       | 538  |  
|                                            | Share purchases (6)         |              |       | (134 | ) |  |       | (126 | )
|                                            | Dividends                   |              |       | (80  | ) |  |       | (79  | )
|                                            |                             |              |       |      |  
|RETAINED EARNINGS AT END OF PERIOD          |                             |              | 4,214 |      |   |  | 3,610 |     
|                                            |                             |              |       |      |  

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)                              |                                                            | Three months
|                                         |                                                            | to March 31 
|inflow/(outflow)                         |                                                            |             
|millions of dollars                      |                                                            | 2004         |      | 2003
|                                         |                                                            |              |      |     
|OPERATING ACTIVITIES                     |                                                            |              |      |      |   |  |      |     
|                                         | Net earnings                                               |              |      | 509  |   |  |      | 538  |  
|                                         | Depreciation and depletion                                 |              |      | 215  |   |  |      | 180  |  
|                                         | (Gain)/loss on asset sales, after tax                      |              |      | (1   | ) |  |      |     |  
|                                         | Future income taxes and other                              |              |      | (89  | ) |  |      | (158 | )
|                                         |                                                            |              |      |      |  
|                                         | Cash flow from earnings                                    |              |      | 634  |   |  |      | 560  |  
|                                         | Accounts receivable                                        |              |      | (179 | ) |  |      | (274 | )
|                                         | Inventories and prepaids                                   |              |      | (295 | ) |  |      | (115 | )
|                                         | Income taxes payable                                       |              |      | 39   |   |  |      | 143  |  
|                                         | Accounts payable and other                                 |              |      | 191  |   |  |      | 386  |  
|                                         |                                                            |              |      |      |  
|                                         | Change in operating assets and liabilities                 |              |      | (244 | ) |  |      | 140  |  
|                                         |                                                            |              |      |      |  
|CASH FROM OPERATING ACTIVITIES           |                                                            |              | 390  |      |   |  | 700  |     
|                                         |                                                            |              |      |      |  
|INVESTING ACTIVITIES                     |                                                            |              |      |      |   |  |      |     
|                                         | Additions to property, plant and
equipment and intangibles |              |      | (319 | ) |  |      | (345 | )
|                                         | Proceeds from asset sales                                  |              |      | 13   |   |  |      | 5    |  
|                                         |                                                            |              |      |      |  
|CASH FROM (USED IN) INVESTING ACTIVITIES |                                                            |              | (306 | )    |   |  | (340 | )   
|                                         |                                                            |              |      |      |  
|FINANCING ACTIVITIES                     |                                                            |              |      |      |   |  |      |     
|                                         | Issuance of common shares
under stock option plan (6)      |              |      | 6    |   |  |      |     |  
|                                         | Common shares purchased (6)                                |              |      | (147 | ) |  |      | (141 | )
|                                         | Dividends paid                                             |              |      | (80  | ) |  |      | (79  | )
|                                         |                                                            |              |      |      |  
|CASH FROM (USED IN) FINANCING ACTIVITIES |                                                            |              | (221 | )    |   |  | (220 | )   
|                                         |                                                            |              |      |      |  
|INCREASE (DECREASE) IN CASH              |                                                            |              | (137 | )    |   |  | 140  |     
|CASH AT BEGINNING OF PERIOD              |                                                            |              | 448  |      |   |  | 766  |     
|                                         |                                                            |              |      |      |  
|CASH AT END OF PERIOD                    |                                                            |              | 311  |      |   |  | 906  |     
|                                         |                                                            |              |      |      |  

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 atMar. 31                             |        | As atDec. 31
|millions of dollars                        |                                        | 2004                                     |        | 2003        
|                                           |                                        |                                          |        |             
|ASSETS                                     |                                        |                                          |        |              |       |  |        |      
|                                           | Current assets                         |                                          |        |              |       |  |        |       |      
|                                           |                                        | Cash                                     |        |              | 311   |  |        |       | 448   | 
|                                           |                                        | Accounts receivable                      |        |              | 1,494 |  |        |       | 1,315 | 
|                                           |                                        | Inventories of crude oil and products    |        |              | 649   |  |        |       | 407   | 
|                                           |                                        | Materials, supplies and prepaid expenses |        |              | 158   |  |        |       | 105   | 
|                                           |                                        | Future income tax assets                 |        |              | 398   |  |        |       | 353   | 
|                                           |                                        |                                          |        |             
|                                           | Total current assets                   |                                          |        | 3,010        |       |  |        | 2,628 |      
|                                           | Investments and other long-term assets |                                          |        | 226          |       |  |        | 259   |      
|                                           | Property, plant and equipment          |                                          |        | 9,321        |       |  |        | 9,218 |      
|                                           | Goodwill                               |                                          |        | 204          |       |  |        | 204   |      
|                                           | Other intangible assets                |                                          |        | 51           |       |  |        | 52    |      
|                                           |                                        |                                          |        |             
|TOTAL ASSETS                               |                                        |                                          | 12,812 |              |       |  | 12,361 |      
|                                           |                                        |                                          |        |             
|LIABILITIES                                |                                        |                                          |        |              |       |  |        |      
|                                           | Current liabilities                    |                                          |        |              |       |  |        |       |      
|                                           |                                        | Short-term debt                          |        |              | 72    |  |        |       | 72    | 
|                                           |                                        | Accounts payable and accrued liabilities |        |              | 2,372 |  |        |       | 2,222 | 
|                                           |                                        | Income taxes payable                     |        |              | 634   |  |        |       | 595   | 
|                                           |                                        | Current portion of long-term debt        |        |              | 502   |  |        |       | 501   | 
|                                           |                                        |                                          |        |             
|                                           | Total current liabilities              |                                          |        | 3,580        |       |  |        | 3,390 |      
|                                           | Long-term debt (7)                     |                                          |        | 868          |       |  |        | 859   |      
|                                           | Other long-term obligations            |                                          |        | 978          |       |  |        | 972   |      
|                                           | Future income tax liabilities          |                                          |        | 1,320        |       |  |        | 1,362 |      
|                                           |                                        |                                          |        |             
|TOTAL LIABILITIES                          |                                        |                                          | 6,746  |              |       |  | 6,583  |      
|SHAREHOLDERS EQUITY                       |                                        |                                          | 6,066  |              |       |  | 5,778  |      
|                                           |                                        |                                          |        |             
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |                                        |                                          | 12,812 |              |       |  | 12,361 |      
|                                           |                                        |                                          |        |             

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



---

|                                                |  |                                                                 
|----------------------------------------------- |  | ----------------------------------------------------------------
|/s/ T.J. Hearn                                  |  | /s/ Paul A. Smith                                               
|                                               
|Chairman, president and
chief executive officer |  | Controller and
senior vice-president,
finance and administration





---



##### 



IMPERIAL OIL LIMITED

|                                  |                             |           |       |          |  |           |       |       |  |      |       |       |  |  |       |       |  |  |     |     |  |  |     |     | 
|--------------------------------- | --------------------------- | --------- | ----- | -------- |  | --------- | ----- | ----- |  | ---- | ----- | ----- |  |  | ----- | ----- |  |  | --- | --- |  |  | --- | --- | 
|BUSINESS SEGMENTS (unaudited)     |                             |           |       |          |  |           |       |       |  |      |       |       |  |  |       |       |  |  |     |     |  |  |     |    
|Three months to March 31          |                             | Resources |       | Products |  | Chemicals
|millions of dollars               |                             | 2004      |       | 2003     |  | 2004      |       | 2003  |  | 2004 |       | 2003 
|                                  |                             |           |       |          |  |           |       |       |  |      |       |      
|REVENUES                          |                             |           |       |          |  |           |       |       |  |      |       |       |  |  |       |       |  |  |     |     |  |  |     |    
|                                  | Operating revenues (a)      |           |       | 890      |  |           |       | 1,004 |  |      |       | 3,923 |  |  |       | 4,168 |  |  |     | 243 |  |  |     | 280 | 
|                                  | Intersegment sales (b)      |           |       | 639      |  |           |       | 635   |  |      |       | 369   |  |  |       | 378   |  |  |     | 65  |  |  |     | 65  | 
|                                  | Investment and other income |           |       |         |  |           |       | 12    |  |      |       | 8     |  |  |       | 8     |  |  |     |    |  |  |     |    | 
|                                  |                             |           |       |          |  |           |       |       |  |      |       |      
|TOTAL REVENUES                    |                             |           | 1,529 |          |  |           | 1,651 |       |  |      | 4,300 |       |  |  | 4,554 |       |  |  | 308 |     |  |  | 345 |    
|                                  |                             |           |       |          |  |           |       |       |  |      |       |      
|EXPENSES                          |                             |           |       |          |  |           |       |       |  |      |       |       |  |  |       |       |  |  |     |     |  |  |     |    
|                                  | Exploration (c)             |           |       | 16       |  |           |       | 7     |  |      |       |      |  |  |       |      |  |  |     |    |  |  |     |    | 
|                                  | Purchases (b)               |           |       | 478      |  |           |       | 585   |  |      |       | 3,206 |  |  |       | 3,430 |  |  |     | 222 |  |  |     | 259 | 
|                                  | Operating (b)               |           |       | 381      |  |           |       | 423   |  |      |       | 258   |  |  |       | 276   |  |  |     | 44  |  |  |     | 40  | 
|                                  | Selling and general         |           |       | 4        |  |           |       | 6     |  |      |       | 269   |  |  |       | 285   |  |  |     | 20  |  |  |     | 30  | 
|                                  | Federal excise tax          |           |       |         |  |           |       |      |  |      |       | 304   |  |  |       | 302   |  |  |     |    |  |  |     |    | 
|                                  | Depreciation and depletion  |           |       | 153      |  |           |       | 119   |  |      |       | 59    |  |  |       | 54    |  |  |     | 3   |  |  |     | 7   | 
|                                  | Financing costs             |           |       |         |  |           |       | 1     |  |      |       |      |  |  |       |      |  |  |     |    |  |  |     |    | 
|                                  |                             |           |       |          |  |           |       |       |  |      |       |      
|TOTAL EXPENSES                    |                             |           | 1,032 |          |  |           | 1,141 |       |  |      | 4,096 |       |  |  | 4,347 |       |  |  | 289 |     |  |  | 336 |    
|                                  |                             |           |       |          |  |           |       |       |  |      |       |      
|EARNINGS BEFORE INCOME TAXES      |                             |           | 497   |          |  |           | 510   |       |  |      | 204   |       |  |  | 207   |       |  |  | 19  |     |  |  | 9   |    
|INCOME TAXES                      |                             |           | 131   |          |  |           | 171   |       |  |      | 69    |       |  |  | 68    |       |  |  | 7   |     |  |  | 3   |    
|                                  |                             |           |       |          |  |           |       |       |  |      |       |      
|NET EARNINGS                      |                             |           | 366   |          |  |           | 339   |       |  |      | 135   |       |  |  | 139   |       |  |  | 12  |     |  |  | 6   |    
|                                  |                             |           |       |          |  |           |       |       |  |      |       |      
|EXPORT SALES TO THE UNITED STATES |                             |           | 332   |          |  |           | 352   |       |  |      | 254   |       |  |  | 248   |       |  |  | 138 |     |  |  | 148 |    
|CASH FLOW FROM EARNINGS           |                             |           | 494   |          |  |           | 425   |       |  |      | 131   |       |  |  | 133   |       |  |  | 13  |     |  |  | 4   |    
|CAPEX (c)                         |                             |           | 275   |          |  |           | 227   |       |  |      | 64    |       |  |  | 120   |       |  |  | 6   |     |  |  | 8   |    
|TOTAL ASSETS AS AT March 31 (b)   |                             |           | 6,568 |          |  |           | 6,120 |       |  |      | 5,812 |       |  |  | 5,510 |       |  |  | 491 |     |  |  | 439 |    
|CAPITAL EMPLOYED AS AT March 31   |                             |           | 3,980 |          |  |           | 3,366 |       |  |      | 3,000 |       |  |  | 2,511 |       |  |  | 269 |     |  |  | 187 |    

|                                  |                             |           |     |              |  |      |     |      |   |  |        |       |  |  |        |       |  
|--------------------------------- | --------------------------- | --------- | --- | ------------ |  | ---- | --- | ---- | - |  | ------ | ----- |  |  | ------ | ----- | -
|Three months to March 31          |                             | Corporate |     | Consolidated
|millions of dollars               |                             | 2004      |     | 2003         |  | 2004 |     | 2003
|                                  |                             |           |     |              |  |      |     |     
|REVENUES                          |                             |           |     |              |  |      |     |      |   |  |        |       |  |  |        |      
|                                  | Operating revenues (a)      |           |     |             |  |      |     |     |   |  |        | 5,056 |  |  |        | 5,452 |  
|                                  | Intersegment sales (b)      |           |     |             |  |      |     |     |   |  |        |      |  |  |        |      |  
|                                  | Investment and other income |           |     | 3            |  |      |     | 6    |   |  |        | 11    |  |  |        | 26    |  
|                                  |                             |           |     |              |  |      |     |     
|TOTAL REVENUES                    |                             |           | 3   |              |  |      | 6   |      |   |  | 5,067  |       |  |  | 5,478  |      
|                                  |                             |           |     |              |  |      |     |     
|EXPENSES                          |                             |           |     |              |  |      |     |      |   |  |        |       |  |  |        |      
|                                  | Exploration (c)             |           |     |             |  |      |     |     |   |  |        | 16    |  |  |        | 7     |  
|                                  | Purchases (b)               |           |     |             |  |      |     |     |   |  |        | 2,833 |  |  |        | 3,196 |  
|                                  | Operating (b)               |           |     |             |  |      |     |     |   |  |        | 683   |  |  |        | 739   |  
|                                  | Selling and general         |           |     |             |  |      |     |     |   |  |        | 293   |  |  |        | 321   |  
|                                  | Federal excise tax          |           |     |             |  |      |     |     |   |  |        | 304   |  |  |        | 302   |  
|                                  | Depreciation and depletion  |           |     |             |  |      |     |     |   |  |        | 215   |  |  |        | 180   |  
|                                  | Financing costs             |           |     | 10           |  |      |     | (58  | ) |  |        | 10    |  |  |        | (57   | )
|                                  |                             |           |     |              |  |      |     |     
|TOTAL EXPENSES                    |                             |           | 10  |              |  |      | (58 | )    |   |  | 4,354  |       |  |  | 4,688  |      
|                                  |                             |           |     |              |  |      |     |     
|EARNINGS BEFORE INCOME TAXES      |                             |           | (7  | )            |  |      | 64  |      |   |  | 713    |       |  |  | 790    |      
|INCOME TAXES                      |                             |           | (3  | )            |  |      | 10  |      |   |  | 204    |       |  |  | 252    |      
|                                  |                             |           |     |              |  |      |     |     
|NET EARNINGS                      |                             |           | (4  | )            |  |      | 54  |      |   |  | 509    |       |  |  | 538    |      
|                                  |                             |           |     |              |  |      |     |     
|EXPORT SALES TO THE UNITED STATES |                             |           |    |              |  |      |    |      |   |  | 724    |       |  |  | 748    |      
|CASH FLOW FROM EARNINGS           |                             |           | (4  | )            |  |      | (2  | )    |   |  | 634    |       |  |  | 560    |      
|CAPEX (c)                         |                             |           |    |              |  |      |    |      |   |  | 345    |       |  |  | 355    |      
|TOTAL ASSETS AS AT March 31 (b)   |                             |           | 311 |              |  |      | 906 |      |   |  | 12,812 |       |  |  | 12,628 |      
|CAPITAL EMPLOYED AS AT March 31   |                             |           | 311 |              |  |      | 946 |      |   |  | 7,560  |       |  |  | 7,010  |      



---

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

|                                      |  |      |       |      |  |  |       | 
|------------------------------------- |  | ---- | ----- | ---- |  |  | ----- | 
|                                      |  | 2004 |       | 2003
|                                      |  |      |       |     
|Purchases                             |  |      | 1,073 |      |  |  | 1,078 | 
|Total intersegment sales              |  |      | 1,073 |      |  |  | 1,078 | 
|Intersegment receivables and payables |  |      | 370   |      |  |  | 347   | 



|(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)                                                    |                                                   | Three months
|                                                               |                                                   |              | 2004 |       | 2003
|                                                               |                                                   |              |      |      
|GROSS CRUDE OIL AND NGL PRODUCTION(thousands of barrels a day) |                                                   |              |      |       |      |  |      |      
|                                                               | Conventional                                      |              |      | 44    |      |  |      | 47    | 
|                                                               | Cold Lake                                         |              |      | 121   |      |  |      | 120   | 
|                                                               | Syncrude                                          |              |      | 63    |      |  |      | 47    | 
|                                                               |                                                   |              |      |      
|                                                               | Total crude oil production                        |              |      | 228   |      |  |      | 214   | 
|                                                               | Natural gas liquids (NGLs) available for sale     |              |      | 35    |      |  |      | 27    | 
|                                                               |                                                   |              |      |      
|                                                               | Total crude oil and NGL production                |              |      | 263   |      |  |      | 241   | 
|                                                               |                                                   |              |      |      
|NET CRUDE OIL AND NGL PRODUCTION
(thousands of barrels a day)  |                                                   |              |      |       |      |  |      |      
|                                                               | Conventional                                      |              |      | 34    |      |  |      | 36    | 
|                                                               | Cold Lake                                         |              |      | 112   |      |  |      | 106   | 
|                                                               | Syncrude                                          |              |      | 62    |      |  |      | 47    | 
|                                                               |                                                   |              |      |      
|                                                               | Total crude oil production                        |              |      | 208   |      |  |      | 189   | 
|                                                               | Natural gas liquids (NGLs) available for sale     |              |      | 28    |      |  |      | 21    | 
|                                                               |                                                   |              |      |      
|                                                               | Total crude oil and NGL production                |              |      | 236   |      |  |      | 210   | 
|                                                               |                                                   |              |      |      
|COLD LAKE BLEND SALES (thousands of barrels a day)             |                                                   |              | 164  |       |      |  | 162  |      
|NGL SALES (thousands of barrels a day)                         |                                                   |              | 48   |       |      |  | 46   |      
|NATURAL GAS
(millions of cubic feet a day)                     |                                                   |              |      |       |      |  |      |      
|                                                               | Production (gross)                                |              |      | 581   |      |  |      | 487   | 
|                                                               | Production (net)                                  |              |      | 522   |      |  |      | 429   | 
|                                                               | Production available for sale (gross)             |              |      | 508   |      |  |      | 419   | 
|                                                               | Production available for sale (net)               |              |      | 449   |      |  |      | 361   | 
|                                                               | Sales                                             |              |      | 511   |      |  |      | 440   | 
|AVERAGE PRICES (dollars)                                       |                                                   |              |      |       |      |  |      |      
|                                                               | Conventional crude oil sales (a barrel)           |              |      | 42.70 |      |  |      | 47.86 | 
|                                                               | Par crude oil price at Edmonton (a barrel)        |              |      | 46.81 |      |  |      | 51.68 | 
|                                                               | Heavy crude oil at Hardisty (Bow River, a barrel) |              |      | 35.50 |      |  |      | 40.12 | 
|                                                               | NGL sales (a barrel)                              |              |      | 31.87 |      |  |      | 39.26 | 
|                                                               | Natural gas sales (a thousand cubic feet)         |              |      | 6.58  |      |  |      | 8.12  | 
|PETROLEUM PRODUCTS SALES
(millions of litres a day)            |                                                   |              |      |       |      |  |      |      
|                                                               | Gasolines                                         |              |      | 31.9  |      |  |      | 32.1  | 
|                                                               | Heating, diesel and jet fuels                     |              |      | 29.7  |      |  |      | 30.4  | 
|                                                               | Heavy fuel oils                                   |              |      | 5.2   |      |  |      | 4.4   | 
|                                                               | Lube oils and other products                      |              |      | 4.6   |      |  |      | 4.7   | 
|                                                               |                                                   |              |      |      
|                                                               | Net petroleum products sales                      |              |      | 71.4  |      |  |      | 71.6  | 
|                                                               | Sales under purchase and sale agreements          |              |      | 15.1  |      |  |      | 14.8  | 
|                                                               |                                                   |              |      |      
|                                                               | Total petroleum products sales                    |              |      | 86.5  |      |  |      | 86.4  | 
|                                                               |                                                   |              |      |      
|TOTAL REFINERY THROUGHPUT (millions of litres a day)           |                                                   |              | 75.9 |       |      |  | 71.1 |      
|REFINERY CAPACITY UTILIZATION (percent)                        |                                                   |              | 95   |       |      |  | 89   |      
|PETROCHEMICAL SALES (thousands of tonnes a day)                |                                                   |              | 3.0  |       |      |  | 3.6  |      





---



##### 



IMPERIAL OIL LIMITED

|                                                                             |                                           |                          |      |       |         |      |      |       |         | 
|---------------------------------------------------------------------------- | ----------------------------------------- | ------------------------ | ---- | ----- | ------- | ---- | ---- | ----- | ------- | 
|SHARE OWNERSHIP, TRADING AND PERFORMANCE                                     |                                           |                          |      |       |         |      |      |      
|(unaudited)                                                                  |                                           | Three months            
|                                                                             |                                           |                          |      | 2004  |         | 2003
|                                                                             |                                           |                          |      |       |         |     
|RETURN ON AVERAGE CAPITAL EMPLOYED (a)
(rolling 4 quarters, percent)         |                                           |                          | 22.8 |       |         |      | 25.6 |      
|RETURN ON AVERAGE SHAREHOLDERS EQUITY
(rolling 4 quarters, percent)         |                                           |                          | 28.1 |       |         |      | 32.8 |      
|INTEREST COVERAGE RATIO  EARNINGS BASIS
(rolling 4 quarters, times covered) |                                           |                          | 58.1 |       |         |      | 61.6 |      
|SHARE OWNERSHIP                                                              |                                           |                          |      |       |         |      |      |      
|                                                                             | Outstanding shares (thousands)            |                          |      |       |         |      |      |       |        
|                                                                             |                                           | Monthly weighted average |      |       | 361,699 |      |      |       | 377,850 | 
|                                                                             |                                           | At March 31              |      |       | 360,297 |      |      |       | 375,830 | 
|                                                                             | Number of shareholders                    |                          |      |       |         |      |      |       |        
|                                                                             |                                           | At March 31              |      |       | 15,381  |      |      |       | 15,884  | 
|SHARE PRICES                                                                 |                                           |                          |      |       |         |      |      |      
|                                                                             | Toronto Stock Exchange (Canadian dollars) |                          |      |       |         |      |      |       |        
|                                                                             | High                                      |                          |      | 64.45 |         |      |      | 47.80 |        
|                                                                             | Low                                       |                          |      | 56.42 |         |      |      | 43.48 |        
|                                                                             | Close at March 31                         |                          |      | 58.87 |         |      |      | 47.35 |        
|                                                                             | American Stock Exchange (U.S. dollars)    |                          |      |       |         |      |      |       |        
|                                                                             | High                                      |                          |      | 48.70 |         |      |      | 32.20 |        
|                                                                             | Low                                       |                          |      | 42.34 |         |      |      | 28.25 |        
|                                                                             | Close at March 31                         |                          |      | 44.84 |         |      |      | 32.14 |        



---

|(a) |  | Return on capital employed is the rolling 4 quarters net
earnings excluding the after-tax cost of financing divided by the
average rolling 4 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. |  | Employee retirement benefits
|-- |  | ----------------------------

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

|                                |                                    |      |              |      |   |  |  |     |  
|------------------------------- | ---------------------------------- | ---- | ------------ | ---- | - |  |  | --- | -
|                                |                                    |      | Three months
|                                |                                    |      | to March 31 
|millions of dollars             |                                    | 2004 |              | 2003
|                                |                                    |      |              |     
|Pension benefits:               |                                    |      |              |      |   |  |  |    
|                                | Current service cost               |      |              | 20   |   |  |  | 18  |  
|                                | Interest cost                      |      |              | 59   |   |  |  | 55  |  
|                                | Expected return on plan assets     |      |              | (56  | ) |  |  | (45 | )
|                                | Amortization of prior service cost |      |              | 7    |   |  |  | 7   |  
|                                | Recognized actuarial loss          |      |              | 17   |   |  |  | 17  |  
|                                |                                    |      |              |     
|                                | Net benefit cost                   |      |              | 47   |   |  |  | 52  |  
|                                |                                    |      |              |     
|Other post-retirement benefits: |                                    |      |              |      |   |  |  |    
|                                | Current service cost               |      |              | 2    |   |  |  | 1   |  
|                                | Interest cost                      |      |              | 6    |   |  |  | 6   |  
|                                | Recognized actuarial loss          |      |              | 1    |   |  |  | 1   |  
|                                |                                    |      |              |     
|                                | Net benefit cost                   |      |              | 9    |   |  |  | 8   |  
|                                |                                    |      |              |     



|4. |  | 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.





---



##### 



IMPERIAL OIL LIMITED



|5. |  | Financing costs
|-- |  | ---------------

|                                                  |  |              |    |      |  |  |     |  
|------------------------------------------------- |  | ------------ | -- | ---- |  |  | --- | -
|                                                  |  | Three months
|                                                  |  | to March 31 
|millions of dollars                               |  | 2004         |    | 2003
|                                                  |  |              |    |     
|Debt related interest                             |  |              | 10 |      |  |  | 8   |  
|Other interest                                    |  |              |   |      |  |  | 1   |  
|                                                  |  |              |    |     
|Total interest expense                            |  |              | 10 |      |  |  | 9   |  
|Foreign exchange expense (gain) on long-term debt |  |              |   |      |  |  | (66 | )
|                                                  |  |              |    |     
|Total financing costs                             |  |              | 10 |      |  |  | (57 | )
|                                                  |  |              |    |     



|6. |  | Common shares
|-- |  | -------------

|                          |  |         |         |         |  |  |         | 
|------------------------- |  | ------- | ------- | ------- |  |  | ------- | 
|                          |  | As at   |         | As at  
|                          |  | Mar. 31 |         | Dec. 31
|thousands of shares       |  | 2004    |         | 2003   
|                          |  |         |         |        
|Authorized                |  |         | 450,000 |         |  |  | 450,000 | 
|Common shares outstanding |  |         | 360,297 |         |  |  | 362,653 | 

In 1995 through 2002, the company purchased shares under eight 12-month normal
course share purchase programs, as well as an auction tender. On June 23, 2003,
another 12-month normal course program was implemented with an allowable
purchase up to 18.6 million shares (five percent of the total on June 19,
2003), 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 - First quarter |           |        | 3.0         |         |  |       | 141   |    
|                             |                      | Full year |        |             | 16.3    |  |       |       | 799 | 
|                             | 2004 - First quarter |           |        | 2.5         |         |  |       | 147   |    
|Cumulative purchases to date |                      |           | 221.5  |             |         |  | 6,115 |      

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:

|                                                                           |  |              |         |      |  |  |         | 
|-------------------------------------------------------------------------- |  | ------------ | ------- | ---- |  |  | ------- | 
|                                                                           |  | Three months
|                                                                           |  | to March 31 
|                                                                           |  | 2004         |         | 2003
|                                                                           |  |              |         |     
|Net earnings (millions of dollars)                                         |  |              | 509     |      |  |  | 538     | 
|(thousands of shares)                                                      |  |              |         |      |  |  |         | 
|Average number of common shares
outstanding, weighted monthly              |  |              | 361,699 |      |  |  | 377,850 | 
|Plus: average number of shares issued
on assumed exercise of stock options |  |              | 693     |      |  |  |        | 
|                                                                           |  |              |         |     
|Weighted average number of diluted common shares                           |  |              | 362,392 |      |  |  | 377,850 | 
|                                                                           |  |              |         |     
|Earnings per share  basic (dollars)                                       |  |              | 1.41    |      |  |  | 1.42    | 
|Earnings per share  diluted (dollars)                                     |  |              | 1.40    |      |  |  | 1.42    | 



---



##### 



IMPERIAL OIL LIMITED



|7. |  | Long-term debt
|-- |  | --------------

|                     |  |                                                                    |  |          |     |         |     |         |     |       |     |  |  | 
|-------------------- |  | ------------------------------------------------------------------ |  | -------- | --- | ------- | --- | ------- | --- | ----- | --- |  |  | 
|                     |  |                                                                    |  |          |     |         |     | As at   |     | As at
|                     |  |                                                                    |  | Interest |     | Mar. 31 |     | Dec. 31
|Issued               |  | Maturity date                                                      |  | rate     |     | 2004    |     | 2003   
|                     |  |                                                                    |  |          |     |         |     |        
|2003                 |  | $250 million due May 26, 2005 and
$250 million due August 26, 2005 |  | Variable |     |         | 500 |         |     |       | 500 | 
|2003                 |  | January 19, 2006                                                   |  | Variable |     |         | 318 |         |     |       | 318 | 
|                     |  |                                                                    |  |          |     |         |     |        
|Long-term debt       |  |                                                                    |  |          | 818 |         |     |         | 818 |      
|Capital leases       |  |                                                                    |  |          | 50  |         |     |         | 41  |      
|                     |  |                                                                    |  |          |     |         |     |        
|Total long-term debt |  |                                                                    |  |          | 868 |         |     |         | 859 |      
|                     |  |                                                                    |  |          |     |         |     |