Business

Saudi Aramco profits up 90% in second quarter amid boom in energy prices


An employee looks after the Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019.

Maxim Shemetov | Reuters

Saudi Arabia’s oil giant Aramco reported a stunning 90 percent jump in second-quarter net income and record half-year results on Sunday, as high oil prices continue to fuel the historic windfall for “Big Oil”.

Aramco said strong market conditions helped push its second-quarter net income to $48.4 billion, up from $25.5 billion a year earlier. The results easily beat analysts’ estimates of $46.2 billion.

“Our record second quarter results reflect growing demand for our products – especially as a low-cost producer with one of the lowest upstream carbon strengths in the industry.” Aramco President and CEO Amin Nasser said.

Aramco said half-year net income jumped to $87.9 billion, easily surpassing the largest listed oil companies, including Exxonmobil, Chevron and BP and other “Big Oil” companies, all are benefiting from one Commodity price boom.

Oil prices rose above $130 a barrel earlier this year, driven by the global energy crisis, made worse by supply disruptions stemming from Russia’s invasion of Ukraine, which rattled markets. global market and contribute to Decade high inflation.

“While volatile global markets and economic uncertainty persist, events in the first half of this year support our view that continued investment in our industry is necessary – both to help ensure the market remains well-supplied and facilitate an orderly energy transition,” added Nasser.

Aramco said it expects oil demand to continue to recover from the pandemic through the remainder of the decade, despite what it calls “deteriorating economic pressures on short-term global forecasts.” “.

The resulting explosion was also a headwind for the Saudi government, which relies heavily on its Aramco dividends to finance government spending. The UK reported a budget surplus of $21 billion for the second quarter.

Aramco said it will maintain its dividend payout of $18.8 billion in the third quarter, including a 53% increase in free cash flow to $34.6 billion.

Main profit

Aramco is using its core profits to invest in its own production capacity in both hydrocarbons and renewables, while also paying down debt.

“We’re running the largest capital program in our history, and our approach is to invest in the reliable energy and petrochemicals the world needs, while developing lower-carbon solutions. could contribute to a broader energy transition,” the company said.

Saudi Arabia, along with its OPEC+ partners, has under increasing pressure to increase oil production to reduce high prices. Company executives say limited global parts production capacity is a major concern for the global pricing outlook.

Aramco said it reached total hydrocarbon production of 13.6 million bpd in the second quarter and is working to increase capacity from 12 million bpd to 13 million bpd by 2027.



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