Saudi Aramco, the world’s largest oil-exporting company, said first quarter net profit surged 30 per cent to $21.7 billion from the year-earlier period, underpinned by higher oil prices and an improved economic environment.
The company plans to pay a dividend of $18.8bn in the second quarter.
“The momentum provided by the global economic recovery has strengthened energy markets, and Aramco’s operational flexibility, financial agility and the resilience of our employees have contributed to a strong first quarter performance,” said Saudi Aramco president and chief executive Amin Nasser.
Both the Brent and West Texas Intermediate oil benchmarks have gained more than 30 per cent since the beginning of the year, supported by vaccination drives in developed economies, stimulus packages and ease of restrictions in several countries.
The global economy is set to expand 6 per cent this year from and earlier 5.5 per cent forecast, as developed economies rebound, according to the International Monetary Fund.
Aramco’s revenue for the first three months of the year rose 225.57 per cent to reach 272.07bn Saudi riyals, while first quarter capital expenditure stood at $8.2bn.
Cash flow from operating activities reached $26.5bn, while free cash flow hit $18.3bn in the first quarter.
The company also benefitted from improved downstream margins and a consolidation of results of Sabic, the Middle East’s largest petrochemical producer and majority owned by Saudi Aramco.
Last week, Sabic swung to a 4.86bn Saudi riyals ($1.29bn) net profit in the first quarter, from a net loss of 1.05bn riyals during the same period a year earlier, due to higher prices for its products. Sabic’s revenue increased 24 per cent to 37.53bn riyals in the first three months of the year amid higher prices for its products.
Saudi Aramco’s total hydrocarbon production reached 11.5 million barrels of oil equivalent per day in the first three months of 2021. The average volumes include 8.6 million bpd of crude.
The kingdom, which leads the Opec+ alliance of producers alongside Russia, contributed an outsized voluntary cut of 1 million bpd from February until the end of March.
Riyadh will phase out the curbs from May onwards by drawing back 250,000 bpd in May, 350,000 bpd in June and 400,000 bpd in July.
Saudi Arabia is also in talks with foreign companies to sell additional shares in Saudi Aramco. The kingdom is considering selling a 1 per cent stake to a leading global energy company, Crown Prince Mohammed bin Salman, said last month.
The potential new stake sale in the oil giant to international investors may happen within the next one or two years, according to Saudi Crown Prince Mohammed bin Salman. The stake sale could be worth about $18.9bn, based on the company’s current market capitalisation of 7.11 trillion riyals ($1.89tn).
The world’s biggest oil company is also looking at ways to monetise its assets.
In April, Saudi Aramco signed a $12.4bn deal for the sale of a 49 per cent stake in a newly formed oil pipeline venture to a consortium led by Washington-based EIG Global Energy Partners.
The agreement is Aramco’s largest since its 2019 listing on the Tadawul exchange, when it raised more than $29bn.
The new venture, Aramco Oil Pipelines Company, will lease usage rights in the state oil company’s stabilised crude oil pipeline network, which connects oilfields to the downstream network, for 25 years.