Saudi Aramco’s third-quarter profit grows 160%

Dubai, United Arab Emirates – Saudi Arabia’s oil giant Aramco increased its net income by 158% in the third quarter to $30.4 billion, as the world’s largest oil company continues to benefit from the reopening of the global economy and soaring oil and gas prices.

The results exceeded expectations, and analysts expect the median net income for the quarter to be $29.1 billion. Saudi Aramco reported that net income in the third quarter of 2020 was US$11.8 billion.

Saudi Aramco President and CEO Amin Nasser said on Sunday: “Our outstanding performance in the third quarter was the result of increased economic activity in major markets and rebound in energy demand.”

“There are still some unfavorable factors in the global economy, partly due to supply chain bottlenecks, but we are optimistic that energy demand will remain healthy for the foreseeable future,” Nasser added.

Saudi Aramco said that the increase in net income was due to the increase in crude oil prices and sales during the quarter, as well as higher refining and chemical profit margins, as the company benefited from the rebound in global energy demand and increased economic activity in major markets.

WTI crude oil has soared above US$85 in recent weeks, which is the highest level since 2014, as the market shifts its focus from demand recovery to supply shortages.Natural gas prices have risen by about 130% this year, which means Global energy crisis It is more likely to be felt in the fourth quarter results.

Saudi Aramco announced that it will pay a huge dividend of US$18.8 billion in the fourth quarter. Free cash flow in the third quarter jumped to 28.7 billion U.S. dollars, higher than the 12.4 billion U.S. dollars in the same period in 2020, which can make up for this expenditure. The leverage ratio that measures the company’s debt status has also increased from 23% at maturity to 17.2%. Higher oil prices and stronger cash flow.

Saudi Aramco also stated that it will “invest for the future”, with capital expenditures in the third quarter of US$7.6 billion, an increase of 19% over the same period in 2020. Aramco stated that it expects capital expenditures in 2021 to be approximately US$35 billion.

The results confirmed a bumper season for “big oil,” a term used to refer to the world’s largest oil and gas company.U.S. oil giant Exxon Mobil with Chevron Also benefiting from rising prices, reported quarterly profits soared to multi-year highs. Royal Dutch Shell Reported record cash flow, and Total energy Also saw a sharp rise in performance.

The strong numbers come from the industry facing New review by activists And cynicism about its climate ambitions. Companies including Saudi Aramco and UAE oil giant Adnoc launched climate initiatives a few days before climate change. COP26 Climate Summit, and plans to invest in Increase oil production In the next few years.

“I think most people would agree that climate change is one of the biggest challenges facing society,” Saudi Aramco chairman Yasir Al-Rumayyan told CNBC via email.

He added: “We need a transition. Don’t ignore that petrochemical products are an essential part of modern life-including the smartphones we all use and the products we use to fight COVID.”

Saudi Aramco’s goal is to achieve net zero emissions from its wholly-owned operations by 2050, and plans to increase oil production to 13 million barrels per day by 2037.Another commitment of Saudi Arabia is to invest nearly US$190 billion to achieve Net zero emissions by 2060 It was praised and doubted by observers in the oil industry.

“The reality is that the energy transition will be long and complex, so oil and gas will continue to play a key role,” Al-Rumayyan said, while also commenting on the energy transition. The recent energy crisis And its connection with the energy transition.

“Recent energy disruptions around the world have demonstrated the need for a stable and inclusive energy transition,” Al-Rumayyan said. “We need a transition to provide a reliable, affordable and low-cost energy supply without leaving anyone behind,” he added.

Saudi Aramco stated that it will disclose more details on how it plans to manage the energy transition and achieve its net-zero strategy in its sustainability report to be released in the second quarter of 2022.

“We fully realize that we still have a long way to go, and the journey is not easy,” Al-Rumayyan said. “We are confident in meeting the challenges and providing leadership, expertise and tools to support global progress towards a low-emissions future.”