Watch: Saudi Aramco reports $4.4B profit, confirms $18B dividend
Saudi Aramco, the world’s largest energy firm, soared to a $4.4bn (£3.2bn) profit in the first three months of the year thanks to a bounce back in global oil and gas markets.
The state-owned firm also maintained its quarterly dividend at $18.8bn, most of which goes to the Saudi Arabian government.
Net income for the period rose 24% year-on-year to $21bn, beating analysts’ estimates of $18bn, as higher oil prices, chemical margins, and stronger refining offset lower production levels.
The company, based in Dhahran in eastern Saudi Arabia, is currently aiming to reduce a debt load, which rocketed last year as the coronavirus pandemic knocked earnings.
Saudi Arabia is the world’s largest exporter of oil and Aramco pledged to maintain its $75bn annual dividend, along with taxes and royalties.
“The momentum provided by the global economic recovery has strengthened energy markets," Amin Nasser, chief executive, said in a statement.
He added: “Given the positive signs for energy demand in 2021, there are more reasons to be optimistic that better days are coming.
“And while some headwinds still remain, we are well positioned to meet the world’s growing energy needs as economies start to recover.”
Aramco also benefited from the Organisation of Petroleum Exporting Countries (OPEC) and its allies restricted supply to bolster markets.
Saudi Arabia’s crude oil production averaged 8.6 million barrels a day in the first quarter, down from 9.8 million barrels a day a year ago.
On Tuesday, Brent Crude (BZ=F), the international benchmark, was up 0.31% to $67.77. It has risen around 80% since the end of October last year after plunging to 21-year lows of less than $20 a barrel last year. It was the sharpest slump in oil demand in the industry’s history.
Last month, Saudi Aramco announced that a US-led consortium is set to invest $12.4bn in its oil pipelines. The energy giant said it had sold 49% of Aramco Oil Pipelines to investors led by Washington-based EIG Global Energy Partners.
Saudi Aramco will lease the usage rights of its pipelines to the new venture, which is valued at $25.3bn.
Last month, the International Energy Agency (IEA) dashed hopes that the pandemic may have brought an end to the world’s rising appetite for oil.
It warned that demand for crude would exceed pre-COVID levels within the next two years unless governments around the world take concrete action.
IEA's boosted oil barrels to 100,000-barrels-a-day in its monthly report. This is the amount by which it expects global oil demand to rebound in this year, which is 5.5 million bd.
The Paris-based body expects American crude production to fall by 180,000 barrels a day. It expects demand to be only 1.4 million barrels a day short of pre-pandemic levels, in the final quarter of 2021.
Watch: Oil to see '$70 a barrel or possibly higher'