Page 4 - MEOG Week 20 2022

MEOG COMMENTARY MEOG

Results and rumours:

all go again for Aramco

Aramco made headlines this week, posting bumper first-
quarter results and mulling the idea of listing its trading arm.

SAUDI ARABIA AFTER the characteristically quiet month of non-state entities and investors.
Ramadan, state-backed Saudi Aramco returned Meanwhile, the interim report showed
to the headlines this week with the announce- that crude oil sales accounted for SAR239.7bn
WHAT: ment of its Q1 results and reports of plans for the ($64bn), refined and chemical products
Saudi Aramco posted listing of its trading arm. Meanwhile, the King- SAR200.6bn ($53.5bn) and natural gas and
a net income of almost dom’s energy minister provided an update on a NGLs SAR18.7bn ($5bn), all up by more than
$40bn during Q1 as oil long-term oil capacity expansion effort. 80% y/y.
prices averaged nearly Declaring its highest net income since listing While reporting that average total hydrocar-
$100. on the Saudi stock exchange (Tadawul) in 2019, bon production during Q1 was 13mn barrels of
Aramco provided even less headline upstream oil equivalent per day, up 1.5mn boepd y/y, there
WHY: operational information than in previous filings. was no breakdown offered for oil and gas. Data
The company is said to seen by Middle East Oil & Gas (MEOG) sug-
be considering launching Q1 report gests that Aramco’s crude oil production aver-
an initial public offering The world’s largest oil company posted the aged 10.22mn barrels per day (bpd). According
of its trading arm to world’s largest profits, declaring net income of to a note by consultancy IGM Energy, this fig-
leverage healthy investor $39.5bn, up 82% year on year as Aramco bene- ure includes Aramco Gulf Operations Co.’s
interest in Gulf NOCs. fited more than anyone from an average realised (AGOC’s) share of production from the Parti-
crude price of $97.7 per barrel, an increase of tioned Neutral Zone (PNZ) but excludes a 50%
WHAT NEXT: more than $37 per barrel y/y. share of the offshore 300,000 bpd Abu Sa’fah
Buoyed by high oil prices, This drove ballooning upstream revenues, field, which is provided to Bahrain.
Aramco is set to continue which grew by a full $30bn compared to Q1 2021 Although Aramco elected not to provide any
spending heavily as it up to $70.3bn. The company’s downstream busi- updates on the ongoing maintenance and devel-
works to expand Saudi ness segment also posted a remarkable increase opment of its massive oil assets, it announced
Arabia’s maximum in revenues, which rose from $4.4bn to $10.2bn that it is nearing the completion of two signifi-
sustainable oil capacity on improved refining and chemicals margins. cant gas developments. Compression projects at
by more than 1mn bpd Free cash flow increased from $18.3bn to Haradh and Hawiyah – gas substructures at the
by 2027. $30.6bn and the company continues to pay the super-giant Ghawar oilfield – are nearing com-
$18.75bn per quarter dividend enshrined in its pletion and will add a combined 1.3bn cubic feet
initial public offering (IPO), although with the (37mn cubic metres) per day of gas when they
state still owning 94.3% of the company directly, come on stream by the end of the year.
and another 4% through the Public Investment Meanwhile, construction is ongoing at a pro-
Fund (PIF), just $319mn per quarter goes to ject to expand the Hawiyah Gas Plant under the

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