An employee looks at the Saudi Aramco oil facility in Abqaiq, Saudi Arabia, on October 12, 2019.
Maxim Shemetov | Reuters
Saudi oil giant Aramco on Sunday reported an impressive 90% jump in second-quarter net income and record half-year results, as high oil prices continue to generate record gains for “Big Oil”.
Aramco said strong market conditions helped boost its second-quarter net profit to $48.4 billion, up from $25.5 billion a year earlier. The result 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 carbon intensities in the industry,” said Aramco Chairman and CEO Amin Nasser .
Aramco said half-year net income soared to $87.9 billion, handily beating the biggest listed oil majors, including Exxonmobil, Chevron and BP and other “Big Oil” companies, which are benefiting from a boom in prices of raw materials.
Oil prices rose above $130 a barrel earlier this year as the global energy crisis, worsened by supply disruptions stemming from Russia’s invasion of Ukraine, hit global markets and contributed to high inflation for decades.
“While global market volatility and economic uncertainty remain, events in the first half of this year support our view that continued investment in our industry is essential, both to help ensure that the markets remain well-supplied to facilitate an orderly energy transition,” Nasser added.
Aramco said it expects the post-pandemic recovery in oil demand to continue for the rest of the decade, despite what it called “downward economic pressures on near-term global forecasts.”
The results of the explosion are also a big boon for the Saudi Arabian government, which relies heavily on its Aramco dividend to fund government spending. The Kingdom posted a budget surplus of $21 billion in the second quarter.
Aramco said it would maintain its dividend payout of $18.8 billion in the third quarter, covered by a 53 percent increase in free cash flow to $34.6 billion.
Big gains
Aramco is using its major earnings to invest in its own production capabilities in both hydrocarbons and renewable energy, while paying down debt.
“We are moving forward with the largest capital program in our history and our focus is to invest in the reliable energy and petrochemicals the world needs, while developing low-carbon solutions that can contribute to the energy transition wider,” the company said.
Saudi Arabia, along with its OPEC+ counterparts, has been under increasing pressure to increase oil production to ease high prices. Company executives said limited global replacement 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 was working to increase capacity from 12 million barrels of oil per day to 13 million barrels of oil per day in 2027.
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