Page 8 - MEOG Week 11 2021

MEOG PERFORMANCE MEOG

Aramco prepares to

announce 2020 results

SAUDI ARABIA SAUDI Aramco will next week announce its Q4 12.7mn barrels of oil equivalent per day (boepd)
and 2020 full-year results in perhaps the indus- to 12.4mn boepd, a reduction of 800,000 boepd
try’s most highly anticipated operational update. compared to the full year average for 2019.
An earnings call will be held on March 22, Much of this reduction can be attributed to
during which President and CEO Amin Nasser the nine-month crude output average falling
and chief financial officer Khaled al-Dabbagh from 9.5mn bpd during the first half to 9.2mn
are likely to present the company’s key opera- bpd by the end of September. This compares
tional data as well as financial results for the past against the company’s full year 2020 plan aver-
year. The call will take place around a week later age of 10mn bpd and implies that Q3 production
than it did last year. was around 8.9mn bpd, another significant dip
The company announced its Q3 results in following the Q2 drop to 7.5-8mn bpd when the
early November, at which point it had registered company sought to stem the financial bleeding
a marked improvement in net income compared and comply with OPEC+ cuts.
to Q2 – $11.8bn up from $6.57bn – the year- This forced Aramco to halt contracting and
over-year comparison showed a drop of nearly reduce its 2020 capital programme by around
$10bn. $12bn.
Despite Nasser saying that the company had Much has changed since then with oil prices
seen “early signs of a recovery in the third quar- having now rebounded to around $70 per barrel
ter due to improved economic activity”, the Q3 and Bank of America said last week that if these
report was notable because of the near omission levels are maintained, Aramco could afford to
of operations. Instead, much of the attention exceed its promised $75bn per year dividend
focused on the company keeping its promise promise.
to pay out its $18.75bn dividend for the quarter While production has been cut by a further
during Q4, while the integration of SABIC was 1mn barrels per day (bpd) since February in line
also noted in a manner that adds substance to with Saudi Arabia’s unilateral reduction in addi-
rumours that the downstream and corporate tion to the latest OPEC+ cuts, the value derived
business units will be spun off to protect the from each barrel produced has put Aramco in a
upstream cash cow. far healthier position.
Rather than providing a quarterly production Though the company is likely to make men-
update, Aramco noted that the nine-month total tion of this in its results, the 2020 data will tell a
hydrocarbon production average had fallen from very different tale.™

P8 www. NEWSBASE .com Week 11 17•March•2021