Middle East

Saudi Aramco Posts Net Profit of $87.9 Billion in H1 2022

Saudi Arabian Oil Company (Aramco) announced its second-quarter 2022 results, declaring a 90% year-on-year increase in net profit and a $18.8 billion dividend payout in the third quarter.

The result set a new quarterly earnings record for the company since its initial public offering in 2019. This was primarily due to higher crude oil prices and sales volumes, as well as higher refining margins.

Aramco delivers record quarterly and first-half net income of $48.4 billion in the second quarter and $87.9 billion in the first half of 2022, compared with $25.5 billion and $47.2 billion respectively in the same period in 2021 Did.

The increase in both periods is primarily due to higher oil prices and sales volumes, as well as strong refining margins in the second quarter and rising downstream margins in the first half of 2022, according to the company.

Free cash flow increased 53% in the second quarter to $34.6 billion and was $65.2 billion in the first half of 2022. This compares to $22.6 billion and $40.9 billion respectively in the same period in 2021. Cash from operating activities.

Return on average capital employed (ROACE) for the second quarter and six months ended June 30 was 31.3%, compared to 16.7% for the same period in 2021.

The company continued to strengthen its balance sheet and maintained a strong investment grade credit rating throughout the market cycle. The gearing ratio was 7.9% on June 30, compared to 14.2% on December 31, 2021. This was primarily due to higher operating cash flow, primarily reflecting higher earnings, and improved downstream margins.

Funding costs continue to be optimized and the company has advanced a portion of its debt related to its acquisition of a 70% stake in SABIC in 2020 to the Public Investment Fund. This reduced the principal amount of his outstanding promissory notes by $12 billion. , on top of his $8 billion cut in the first quarter of 2022.

Aramco announced a dividend of $18.8 billion in the second quarter, due in the third quarter of 2022. Additionally, as previously disclosed in its 2021 Annual Report, the company distributed bonus shares to shareholders in the second quarter of 2022 at a rate of one of his shares. For every 10 shares held. Aramco aims to maintain sustainable and progressive dividends in line with its future prospects and underlying financial results.

Capital expenditures increased 25% to $9.4 billion in the second quarter and 8% to $16.9 billion in the first half of 2022 compared to the same period in 2021. Aramco continues to invest and pursue strategic integration to seize growth opportunities. expansion of carbonization business and development of low-carbon business prospects.

Amin H. Nasser, President and CEO of Saudi Aramco, said:

“While global market volatility and economic uncertainty remain, the events of the first half of this year are encouraging continued investment in the industry to ensure market supplies and facilitate an orderly energy transition. confirms our view that is essential.”

He added:

“But while there is a very real and current need to secure energy supplies, climate goals remain important. We are working to increase production from the source Hydrogen.

“We are undertaking the largest capital program in history and our approach is to invest in the reliable energy and petrochemicals the world needs, while developing low-carbon solutions that can contribute to the broader energy transition. to develop.”

First Half Operational Highlights
Saudi Aramco also demonstrated reliable upstream performance with total hydrocarbon production reaching 13.6 million barrels of oil equivalent per day in the second quarter of 2022.

Aramco continues its strong track record of reliable supply, achieving 99.8% reliability in delivering crude oil and other products in the second quarter of 2022.

The company’s gas expansion program is on track to increase production with the initial construction and design of the Jafurah gas plant underway. The facility has a planned capacity of 3.1 billion standard cubic feet of raw gas per day (bscfd) and by 2027 he will be completed in two phases.

Construction of the Hawiyah Unayzah Gas Reservoir Storage has reached an advanced stage and the injection phase is nearing completion. This is the Kingdom’s first underground natural gas storage project to manage seasonal changes in demand, improving asset utilization and cost efficiency.

The company successfully deployed the Ghawar-1 supercomputer for reservoir simulation. This is his second largest supercomputer in the MENA region and is expected to increase the number of completed simulation runs, allowing Aramco to explore more opportunities within its existing resources. .

Most recently, the company announced a stock purchase agreement to acquire Valvoline Global Products for $2.65 billion.

read: Aramco Acquires Valvoline Global Products for $2.65 Billion

The integration of SABIC into Aramco is progressing ahead of schedule and the company continues to capture synergies in multiple areas.

In May, a refining and petrochemical joint venture with Malaysia’s Petronas, known as PRefChem, began operations and is expected to reach full capacity of 300,000 barrels per day by the end of the year. Aramco’s investment in his PRefChem offers expansion opportunities in important growth markets and provides new geographies for crude oil production.

On 15 June, Aramco published its first Sustainability Report. It outlines how the company will achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly owned and operated assets by 2050.

read: Saudi Aramco makes big plans with carbon storage

Aramco also announced a significant expansion of its Namaat Industrial Investment Program with 55 agreements and memorandums of understanding currently in place across the sustainability, digital, industrial, manufacturing and social innovation sectors, creating jobs and improving the economy of the Kingdom. We aim to expand the energy and chemicals value chain. .

https://gulfbusiness.com/saudi-aramco-posts-net-income-of-87-9bn-for-h1-2022/ Saudi Aramco Posts Net Profit of $87.9 Billion in H1 2022

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