Saudi oil giant Aramco sees half-year earnings climb to $47B
Saudi Arabia's oil-producing company, Aramco, announced
Sunday a net income of around $47 billion for the first half of the year,
double what it earned over the same period last year when the coronavirus
grounded travel and pummeled global demand for oil.
This puts Aramco back squarely where it was before the
pandemic struck and sunk earnings to $23.3 billion in the first six months of
2020.
Aramco CEO Amin Nasser said the company's second quarter
results “reflect a strong rebound in worldwide energy demand.”
“While there is still some uncertainty around the challenges
posed by COVID-19 variants, we have shown that we can adapt swiftly and effectively
to changing market conditions,” he said.
The company also confirmed in its earnings report that its
performance in the second quarter of 2021 “was primarily driven by higher crude
oil prices.” Benchmark Brent crude oil traded just over $70 a barrel Friday, up
from the $45 a barrel range it hovered at this time last year.
The majority state-owned oil company said net income for the
second quarter was $25.46 billion compared to the dramatic figure of just $6.6
billion last year. This quarter's figure is slightly higher than the $24.7
billion it earned in the second quarter of 2019, before the coronavirus.
Its second quarter earnings are also an improvement from the
first quarter of the year, which raked in $21.7 billion.
Saudi Arabia has led global efforts by major oil producers
to curb output in order to keep prices from crashing as coronavirus uncertainty
impacts consumer demand for crude. Under the agreement, the kingdom has been
producing between 8-9 million barrels per day since May 2020.
Aramco's financial health is crucial to Saudi Arabia’s
stability. Despite massive efforts by Saudi Crown Prince Mohammed bin Salman to
diversify the economy, the kingdom still depends heavily on oil exports to fuel
government spending.
The company said it will uphold its commitment to pay out
dividends of $18.75 billion for the second quarter as part of its promise to
pay $75 billion in annual dividends. Most of that payout is to the company's
primary shareholder, the Saudi government.
Its operating cash flows and cash proceeds were buoyed when
it signed a $12.4 billion pipeline deal with a consortium led by a U.S.-based
group, as well as a $6 billion Shariah-compliant bond issuance.
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