Saudi Aramco Earns $88B on High Prices 08/14 10:03

   

   DUBAI, United Arab Emirates (AP) -- Saudi energy company Aramco said Sunday 
its profits jumped 90% in the second quarter compared to the same time last 
year, helping its half-year earnings reach nearly $88 billion. The increase is 
a boon for the kingdom and the crown prince's spending power as people around 
the world pay higher gas prices at the pump while energy companies rake in top 
earnings.

   Major oil companies had a strong quarter with Exxon Mobil booking an 
unprecedented $17.85 billion profit while Chevron made a record $11.62 billion. 
The U.K.'s Shell shattered its own profit record.

   Aramco's net profits were helped by second-quarter earnings ending in June 
that hit $48.4 billion -- a figure higher than all of the first six months of 
2021, when profits reached just $47 billion. It sets a new quarterly earnings 
record for Aramco since it first floated around 5% of the company on the Saudi 
stock market in late 2019.

   Its earnings for just this past quarter are almost what Aramco's full-year 
profits were in 2020, when demand for oil crashed during pandemic lockdowns. 
Its half-year earnings of $87.9 billion put Aramco on track to far surpass the 
full-year earnings of 2019, prior to the pandemic, when profits hit $88 billion.

   The company credited the jump to higher crude oil prices and volumes sold, 
as well as higher refining margins. Saudi Arabia's vast oil reserves are among 
the cheapest to produce in the world.

   Aramco's finances are crucial to the kingdom's stability; when its margins 
are high, Saudi Arabia's economic growth reflects that. As countries around the 
world grapple with inflation and recession, the International Monetary Fund 
projects the Saudi economy will grow by more than 7.6% this year, the highest 
globally.

   Despite years of efforts by Crown Prince Mohammed bin Salman to diversify 
the economy, and some success in increasing non-oil revenue, Saudi Arabia 
continues to rely heavily on crude exports that pay for public sector salaries, 
generous benefits to citizens and defense spending. Aramco's earnings also help 
the prince carry out his Vision 2030 infrastructure goals.

   The company will pay a dividend of $18.8 billion for the second quarter to 
shareholders, as it has promised to do since its debut on the stock market. The 
higher profits bode well for the Saudi government, which is the main 
shareholder of Aramco.

   Aramco is seen as the key to overhauling the Saudi economy. Its proceeds 
from the IPO were transferred to the country's sovereign wealth fund to invest 
in projects to spur new sectors and generate new jobs for Saudi youth.

   Brent crude has been trading at around $100 a barrel, even as OPEC, led by 
Saudi Arabia, and non-OPEC producers, led by Russia, have been steadily 
increasing production levels that had been cut during the height of the 
pandemic. The price of oil rose sharply after Russia invaded Ukraine in 
February. Prices have dipped below the $100 mark in past weeks amid slowed-down 
economic growth in China and the U.S.

   Aramco President CEO Amin Nasser said he expects oil demand to continue to 
grow for the rest of the decade, despite current downward economic pressures. 
OPEC has said it expects world oil demand to rise by around 3 million barrels 
per day this year with total oil demand to average 100 million barrels a day.

   Nasser said Aramco's financial results so far this year reflect this 
increased demand for oil, even as countries around the world, including Saudi 
Arabia, pledge to cut their carbon emissions to avert catastrophic global 
warming levels.

   "The world is calling out for affordable, reliable energy and we are 
answering that call," he said, urging greater investments in oil and gas.

   "At a time when the world is worrying about energy security, you are 
investing in the future of our business. Our customers know that whatever 
happens, Aramco will always deliver," Nasser said in a short video released 
with the financial results.

   Saudi Arabia is currently producing around 10.5 million barrels per day, 
with much of that exported to Asia and its largest customer, China. The crown 
prince has said the kingdom's maximum production capacity is 13 million barrels 
per day. Aramco says it is working to one day reach that ceiling.

   Aramco produces all of Saudi Arabia's oil and gas with its production limits 
dictated by the energy ministry.