Page 4 - MEOG Week 44 2021

MEOG COMMENTARY MEOG

Aramco continues strong

performance on high oil prices

Saudi Aramco announced its latest set of impressive financial results as the
company’s performance continues to reap the benefits of higher oil prices.

SAUDI ARABIA SAUDI Aramco this week announced its Q3 per barrel during full-year 2020.
results which were highlighted by a $30.4bn net In a statement to accompany the results,
income, up 158% compared to the same period Aramco’s President and CEO Amin Nasser said
WHAT: last year, taking it back to top spot as the world’s that the company’s performance “was a result of
The company’s net most profitable company. increased economic activity in key markets and a
income ballooned to Like other oil producers, the company con- rebound in energy demand, as well as our unique
more than $30bn during tinues to benefit from buoyant oil prices that low-cost position, our financial discipline and
Q3 on the back of a $4.9 have seen it surpass expectations and earn more our proven ability to reliably deliver essential
per barrel increase in the than enough to continue covering the company’s energy and chemical products to our customers”.
realised price of crude. $18.75bn quarterly dividend obligation. He added: “Some headwinds still exist for
While work remains ongoing to expand the global economy, partly due to supply chain
WHY: maximum sustainable capacity (MSC) for oil bottlenecks, but we are optimistic that energy
As OPEC+ restrictions production by 1mn barrels per day (bpd), the demand will remain healthy for the foreseeable
have been eased, company has announced ambitious plans to future.”
Aramco’s crude oil reach net zero and reached financial close on a Meanwhile, he said the company would
production increased by 1.5GW solar project in the Kingdom. maintain its long-term investment strategy
900,000 bpd during Q3. and “build on our track record of low-cost and
Finances low-carbon intensity performance to advance
WHAT NEXT: Aramco said that its Q3 results reflect “higher our recently announced ambition to achieve
With more crude flowing crude oil prices and volumes sold and stronger net-zero Scope 1 and Scope 2 greenhouse gas
from the wellhead, refining and chemicals margins in Q3, which emissions across our wholly-owned operated
the company has also were underpinned by rebounding global energy assets by 2050”.
increased the share of demand and increased economic activity in key On the theme of investments, Q3 capital
output heading to its markets”. expenditure increased by 19% year-over-year to
owned and affiliated It provides further steady, positive momen- $7.6bn, in line with anticipated full-year capex
downstream facilities as tum following the company’s $25.2bn Q2 results, of $35bn. The majority of spending is being
it seeks to control the up from the $21.7bn achieved in Q1. A major directed to “ongoing crude oil increment and
value chain. driver behind the stronger performance was the other development projects” which contribute to
average realised price of crude, which increased fulfilling the Ministry of Energy (MoE) directive
from $67.9 per barrel in Q2 to $72.8 per barrel to increase MSC from 12mn bpd to 13mn bpd.
in Q3. During the company’s Q2 earnings call in
This metric demonstrates the reason for the August, Nasser noted that Aramco had begun
company’s improved fortunes perhaps better a two-year front-end engineering and design
than any other with Aramco achieving an aver- (FEED) stage of efforts to add to MSC, saying
age price of $60.2 per barrel in Q1 and just $40.6 that most of the output expansion would come

P4 www. NEWSBASE .com Week 44 03•November•2021