Entreprise

Saudi Aramco’s full-year profits more than double due to soaring oil prices

Employees looking at Saudi Aramco’s oil facility in Buqayq, Saudi Arabia, October 12, 2019.

Maxim Shemetov | Reuters

Saudi Arabia’s oil giant Aramco reported a surge in full-year earnings on Sunday, more than doubling its net income year-on-year to $ 110 billion.

Aramco’s net income in 2021 was $ 110 billion in 2021, an increase of 124% compared to $ 49 billion in 2020.

Analysts surveyed by Reuters forecast net income of $ 109.7 billion for the full year, which was in line with expectations. Saudi Aramco shares in Saudi Aramco rose nearly 4% in trading on Sunday after the result.

“Our strong performance is a testament to our financial discipline, flexibility in evolving market conditions and a steady focus on long-term growth strategies aimed at increasing shareholder value,” said Aramco CEO Amin Nacelle. Said in the earnings announcement.

Soaring oil

Aramco benefited from soaring oil prices in 2021, with international benchmark Brent crude surpassing $ 80 a barrel by the end of the year, rising about 50% in 12 months. A complex of energy and commodities, even before Russia invaded Ukraine.

“Although the economic situation has improved significantly, the outlook remains uncertain due to various macroeconomic and geopolitical factors,” he said, adding that the oil market is “the largest sanction in Russia in decades.” It was after warning that it was heading for a “supply crisis.” Hit and buyers avoid its export.

“We see oil demand as healthy. Unfortunately, global reserves are declining, inventories are low, and investment is scarce,” Nacelle said in a statement on Sunday. dynamic.

Just hours after Saudi Aramco authorities confirmed another attack on the Aramco facility on Sunday, there was a call for results and profits, and the Houthi rebels used missiles and drones to build an Aramco fuel depot and a liquefied natural gas plant. Targeted at least 6 sites across Saudi Arabia, including.

“There were no injuries or deaths, and the supply to the company’s customers was unaffected,” Nacelle said.

Nacelle pointed out Aramco’s response to a major attack on the facility in 2019, “demonstrating its ability to respond quickly and effectively. I was able to restore my business. ”

Special payment plan

Aramco has also declared a $ 18.8 billion fourth-quarter dividend to be paid in the first quarter of 2022. Dividends will be covered by an increase in the net cash flow to $ 107.5 billion in 2021, compared to $ 49.1 billion in 2020.

Aramco said it would recommend using $ 4 billion in retained earnings to pay investors bonus shares, subject to approval. Under this recommendation, shareholders will receive one bonus share for every ten shares they own. As a result, the total dividend for 2021 will be: $ 75 billion in cash in addition to bonus stock.

Profit figures are in stark contrast to the company’s 2020 revenue, which fell 44% year-on-year due to the collapse of demand caused by the coronavirus pandemic.

At that time, Nacelle described Aramco’s fiscal year 2020 as one of the most “challenging years” in recent history.

Increased capacity

The company also said it aims to increase crude oil production capacity to 13 million barrels per day by 2027, expand liquids to chemical production, and increase gas production by more than 50% by 2030.

Aramco also states that it wants to achieve net-zero greenhouse gas emissions in Scope 1 and Scope 2 across its fully owned assets under management by 2050. Scope 1 refers to direct emissions from sources owned or controlled by the company, and Scope 2 covers indirect emissions. From the generation of purchased electricity consumed by the company.

“We play our role, but that’s not enough. Other players in the industry need to play their role and increase their investment,” Nacelle said.

Capital spending in 2021 was $ 31.9 billion, an increase of 18% from 2020. This was primarily due to increased crude oil, tanazib gas plants and increased activity related to development drilling programs. Aramco estimates that capital spending in 2022 will be approximately $ 40-50 billion. Further growth is expected until around the middle of 10 years.

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