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Saudi Aramco profit soars on higher prices and refining margins

Stock Markets Aug 14, 2022 06:15AM ET
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© Reuters. FILE PHOTO: A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov/File Photo
 
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By Hadeel Al Sayegh

DUBAI (Reuters) -State oil giant Saudi Aramco (TADAWUL:2222) on Sunday reported its highest quarterly profit since the company went public in 2019, boosted by higher oil prices and refining margins.

Aramco joins oil majors such as Exxon Mobil Corp (NYSE:XOM) and BP (NYSE:BP) that have reported strong or record breaking results in recent weeks after Western sanctions against major exporter Russia squeezed an already under-supplied global market causing a surge in crude and natural gas prices.

The company expects "oil demand to continue to grow for the rest of the decade despite downward economic pressures on short-term global forecasts," CEO Amin Nasser said in Aramco's earnings report.

Net profit increased 90% to 181.64 billion riyals ($48.39 billion) for the quarter to June 30 from 95.47 billion riyals a year earlier and compared with a mean estimate from 15 analysts of $46.2 billion.

It declared a second-quarter dividend of $18.8 billion, in line with its own target, to be paid in the third quarter.

Aramco shares, which were little changed on Sunday, have risen more than 25% this year.

Nasser, speaking to reporters on an earnings call, voiced concern over a lack of global investment in hydrocarbons that has led to "very limited" spare capacity. He said Aramco stands ready to raise oil output to its maximum sustained capacity of 12 million barrels per day should the Saudi government ask.

Aramco said its average total hydrocarbon production was 13.6 million barrels of oil equivalent per day in the second quarter. The company is working to increase production from multiple energy sources, including renewables and blue hydrogen as well as oil and gas, as it works on both energy security and climate goals, Nasser said.

Capital expenditure increased by 25% to $9.4 billion in the quarter compared to the same period in 2021. Aramco said it continued to invest in growth, expanding its chemicals business and developing prospects in low-carbon businesses.

It is also currently studying opportunities in the liquid-to-chemicals sector with a focus on the Asian market.

In July, Exxon posted its biggest quarterly profit ever, a net income of $17.9 billion, an almost four-fold increase from a year earlier, while European majors Shell (LON:RDSa) and TotalEnergies also benefited from surging margins for making fuels like gasoline and diesel.

The Saudi stock market, up 11% this year, is very promising for company listings in the near future, Nasser said, adding that there is "some expectation" that Aramco might list some entities within the firm.

Aramco is working to merge two energy trading units, with Aramco Trading Co to absorb Motiva Trading, ahead of a potential initial public offering of the business, sources have said.

($1 = 3.7540 riyals)

Saudi Aramco profit soars on higher prices and refining margins
 

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Comments (3)
Muhammad Mehran
Muhammad Mehran Aug 14, 2022 7:23AM ET
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its is expiration data
Wesley Adams
Wesley Adams Aug 14, 2022 6:06AM ET
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hey
Ernie Keebler
Ernie Keebler Aug 14, 2022 5:50AM ET
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Do you want to keep giving these global maggots your hard earned cash?  Fight back!  Cut back on driving, use E-85 it's $1.50 cheaper than gas.  Demand they put octane #'s on E-85 pumps just like regular and premium are required.  Go to electric instead of buying a gas guzzling performance suv or truck.  The future is in your hands. Don't give them any more cash so they can control your energy future
David Willey
David Willey Aug 14, 2022 5:50AM ET
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What kind of EV are u driving? Your utility using natural gas?
Ernie Keebler
Ernie Keebler Aug 14, 2022 5:50AM ET
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David Willey  we have 3 E-85 vehicles.  All my vehicles, trucks, tractors,special equipment is old. Since I walk 80% of my workday I run the 20+ pieces of equipment, trucks, etc we own very little on a daily basis..  Since my wife just got a job she needs to drive to we have been narrowing our search for a decent EV.  Have any suggestions?  Thanks
Ernie Keebler
Ernie Keebler Aug 14, 2022 5:50AM ET
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David Willey  wind farm just went up in our area the last three years and a large solar farm is planned a few miles,away.
jason xx
jason xx Aug 14, 2022 5:50AM ET
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There are a lot of new ones coming out.
 
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