Saudi Aramco’s profit increases 90% in the second quarter amid the boom in energy prices

An employee observes the Saudi Aramco oil plant in Abqaiq, Saudi Arabia on October 12, 2019.

Maxim Shemetov | Reuters

Saudi oil giant Aramco posted a stunning 90% increase in second-quarter net profit and record half-year results on Sunday as high oil prices continue to generate historic gains for “Big Oil”.

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

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

Aramco said half-year net profit rose to $ 87.9 billion, easily outpacing the major listed oil majors, including Exxonmobil, Chevron and BP and other “Big Oil” companies, all of which are benefiting from a boom in oil prices. commodity prices.

Oil prices soared above $ 130 a barrel earlier this year as the global energy crisis, exacerbated by supply disruptions resulting from the Russian invasion of Ukraine, rocked global markets and contributed to decades of high inflation.

“While global market volatility and economic uncertainty remain, events during the first half of this year support our view that continued investment in our industry is essential, both to ensure markets remain well-supplied and to facilitate an energy transition. neat, ”Nasser added.

Aramco said he expects the post-pandemic recovery in oil demand to continue for the remainder of the decade, despite what he called “downward economic pressures on global short-term forecasts.”

The results of the outbreak are also a great boon to the Saudi Arabian government, which relies heavily on its Aramco dividend to finance public spending. The Kingdom recorded a budget surplus of $ 21 billion in the second quarter.

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

Important earnings

Aramco is using its largest earnings to invest in its production capacities in both hydrocarbons and renewables, while also paying off the debt.

“We are pursuing the largest capital program in our history and our approach is to invest in the reliable energy and petrochemicals the world needs, while developing low-carbon solutions that can contribute to the wider energy transition, “the company said.

Saudi Arabia, along with its OPEC + counterparts, has come under increasing pressure to increase oil production to ease high prices. Company executives said limited global reserve production capacity was a major concern for the global price outlook.

Aramco said it achieved total hydrocarbon production of 13.6 million barrels of oil equivalent per day in the second quarter and is working to increase capacity from 12 million barrels of oil per day to 13 million barrels of oil per day. day by 2027.