Saudi profit feast: Aramco’s quarterly profit surges to $30.4 bn, led by higher crude prices

Soaring crude prices have catapulted Saudi Aramco, the world’s largest crude oil exporter, to a net income of $30.4 billion for the third quarter, almost 160% higher than the $11.8 billion profit made in the same period last year.

“The increase in net income was primarily the result of higher crude oil prices and volumes sold and stronger refining and chemicals margins in Q3, which were underpinned by rebounding global energy demand and increased economic activity in key markets,” the company said.

Chief executive Amin Nasser said the improved results reflect “increased economic activity in key markets and a rebound in energy demand,” along with the company's own efforts to reduce costs.

Nasser noted that “some headwinds still exist for the global economy, partly due to supply chain bottlenecks”.

However, he added that Aramco remains optimistic that demand for its products will remain healthy for the foreseeable future.

“Looking ahead, we are maintaining our strategy to invest for the long term, and we will build on our track record of low-cost and low-carbon intensity performance,” he said.

The company announced a dividend of $18.8 billion to be paid in the fourth quarter.

Aramco recently stated its intention to achieve net-zero greenhouse gas emissions across its operating assets by 2050, on a Scope 1 and Scope 2 basis.

Capital expenditure

Saudi Aramco's capital expenditure in the third quarter stood at $7.6 billion, up 19% from the same period last year.

“This increase was primarily due to ongoing crude oil increment and other development projects,” it said.

Aramco said it “maintains a flexible approach to capital allocation and continues to expect 2021 capital expenditure to be approximately $35 billion”.

The company spent $27 billion in 2020, a year when budgets were slashed in response to the Covid-19 pandemic, leading to postponements of projects as well as large delays in payments to key contractors.

The state-controlled company's capex has been rebounding in 2021, but is lower than previous guidance of $40 billion to $45 billion.

Aramco’s hydrocarbon production averaged 12.9 million barrels per day of oil equivalent in the third quarter of 2021, including average crude oil production of 9.5 million barrels per day (bpd), it said.

Capacity enhancement

The company is “proceeding with implementing the government’s directive to increase its crude oil maximum sustainable capacity from 12 million bpd to 13 million bpd”.

Aramco is carrying out multiple incremental projects that include some of its giant oilfields such as Marjan, Zuluf and Berri, aimed at increasing the kingdom’s oil production capacity.

Most incremental oil production capacity in Saudi Arabia is likely to come from its giant offshore oilfields that are among the largest in the world.