Saudi Aramco

Performance indicators

2023:38% drop in net profit in Q2 to $30 billion

Saudi Arabia's state oil giant Aramco [1] reported a drop in net profit in the second quarter of 2023 by almost a 38% amid lower oil prices and shrinking margins in refining and the chemical industry, and increased dividends through a new payout tied to performance.

Aramco's net income for the quarter ended June 30 declined to 112.81 billion riyals ($30.07 billion). US) compared to 181.64 billion riyals a year earlier, exceeding the average forecast of 15 analysts of $29.8 billion. The Group announced a benchmark dividend for the second quarter of about $19.5 billion, roughly equal to the amount paid for the first quarter.

2022

Record profit - $161 billion

In March 2023, Saudi Aramco announced a huge annual profit. The company's net income was $161 billion, its highest since going public.

Revenue of $48.4 billion in Q2

Profit in the first quarter $39.5 billion - a record since IPO

The largest oil company in the world - Saudi Aramco - reported a record quarterly profit since its placement on the stock exchange, which was facilitated by a sharp rise in oil prices after the start of a special military operation of the Russian Federation in Ukraine.

1st in the world in terms of capitalization

In May 2022, Saudi Aramco became the most expensive company in the world.

As of March 11, 2022

2021

Third place in the world in terms of net revenue - $401 billion

The largest companies in the world in terms of net revenue in 2021
"'Net revenue"' (net revenue) - revenue for added value.
This revenue includes revenue costs such as discounts, returns, etc.
Net Revenue Formula = Gross Revenue - Directly Related Selling Expenses.

The world's most profitable company

Net profit for 2021 in billions of dollars of eight leading public companies in the world. Data: Forbes Global 2000, Source: Statista

2020

In the list of the largest oil and gas companies in the world

2019: The world's most profitable company

The 20 most profitable companies in the world. Earnings per day, 2019

2019

History

2024: Saudi Arabian government asks company to stop ramping up oil output above 12 million barrels per day

In January 2024, Saudi Aramco said the government had asked it to stop ramping up oil production, a major U-turn. The company was asked to keep capacity at 12 million barrels per day.

2023

Purchase of a stake in LNG producer MidOcean Energy for $500 million

In September 2023, it was announced that Saudi Aramco is buying a stake in MidOcean Energy for $500 million, which will be its first investment in an LNG project, the company seeks to diversify its operations beyond the main oil business.

Aramco is investing its financial resources in LNG at a time when global demand for this fuel has skyrocketed, especially in Europe, which is trying to replace reduced pipeline supplies from Russia. Some Asian countries are using increasing amounts of supercooled fuel, seeking to eliminate the use of dirtier coal and oil.

UN investigation against company on impact on climate change

In August 2023, it became known that the UN was investigating Saudi Aramco for possible human rights violations related to climate change caused by the use of fossil fuels.

The UN Working Group on Human Rights and Multinationals informed the company that it was considering claims that Aramco's activities were "contrary to the goals, responsibilities and obligations under the Paris Agreement on Climate Change" and "negatively affected the promotion and protection of human rights in the context of climate change."

The probe follows ClientEarth's accusations against Aramco over climate change. The UN is stepping up calls for greater action to tackle global warming.

2022

Buying 10% at China's largest refinery

In April 2023, Saudi Aramco acquired 10% in China's Rongsheng Petrochemical and co-owned China's largest refinery complex. Now the Saudis will supply 480 thousand barrels of oil there daily.

Purchase of 30% in Polish refinery

In November 2022, Saudi Aramco acquired 30% in a Polish refinery with a capacity of 210,000 barrels per day.

Buying 7.4% stake in IIoT developer Cognite from Aker BP

In early February 2022, Saudi Aramco acquired a 7.4% stake in Cognite from oil company Aker BP. Read more here.

Oil supply contract with Polish PKN Orlen

In January 2022, the kingdom's oil company Saudi Aramco signed a long-term contract for the supply of Polish PKN Orlen to 337 thousand barrels per day. Saudi supplies, which will be delivered by tankers to the ports of the Baltic Sea, will more than triple and cover almost half of Poland's oil consumption, which is 650-700 thousand barrels per day.

2021: Hackers demand $50 million for deleting leaked company data

1 terabyte of Saudi Arabian Oil Co. data ended up in the hands of a ransomware. The state drilling enterprise was offered to delete data for $50 million dollars in cryptocurrency.

In July 2021, Saudi Aramco confirmed the leak of some of the company's files.

"Aramco recently became aware of an indirect leak of a limited amount of company data held by third-party contractors."

"We confirm that the data breach was not related to a breach of our systems, had no impact on our operations, and the company continues to maintain robust cybersecurity."

2020

Missile strike of the Houthi movement "Ansar Allah" on the company's facility

In November 2020, Saudi Arabia confirmed the fact of a missile strike by the Ansar Allah Houthi movement on the facility of the world's largest oil company Saudi Aramco. It is noted that the goal was not only the national resources of the kingdom, but also the security of the world energy system. Riyadh believes that Iran is behind the actions of the Houthis. The US called on Ansar Allah to "expel the Iranians." Otherwise, the movement may be included in the American list of terrorist organizations.

SABIC purchase for $69 billion

On June 14, 2020, the transaction for the sale SABIC of the world's largest oil company Saudi Aramco was closed. The latter, according to the terms of the agreement, received a 70% stake in SABIC for $69 billion. 30% of SABIC shares remained under the control of the Saudi sovereign fund (Public Investment Fund, PIF). More. here

2019

Record $29.4 billion IPO

In December 2019, the record for the world's largest IPO was broken when Saudi state oil company Saudi Aramco went public on the Riyadh stock exchange and raised $29.4 billion.

It was part of a plan to reduce Saudi Arabia's dependence on oil. Crown Prince Mohammad bin Salman's Vision 2030 economic reform plan envisions investing money generated by the IPO to diversify the country's economy.

Drone attack on oil facilities

On September 14, 2019, Saudi Aramco's oil facilities  were attacked by drones. Due to the explosions, production operations at these facilities were temporarily suspended.

At the same time, the kingdom's daily oil production was almost halved - by 5.7 million barrels per day from the usual level of about 9.8 million.

The drone attack brought production in one of the largest oil powers to a halt. Experts expect prices to rise to $100 per barrel

Followers  of Yemen's rebel Houthi Ansar Alla movement claimed responsibility for the attack. The rebels launched 10 drones that hit oil facilities in areas of the Abqaiq and Khurais fields in eastern Saudi Arabia.

After the opening of trading on the London ICE exchange on September 16, 2019, oil prices showed a sharp increase. Thus, Brent futures rose by almost 19% - to $71.62 per barrel, and WTI futures - by 15.8%, to $63.47.

Analysts and traders polled by Reuters suggested that oil prices would rise by $5-10 per barrel on Monday, and in the long term could reach $100 - if Saudi Arabia cannot quickly resume supplies.

US Secretary of State Mike Pompeo accused Iran of an "unprecedented attack on global energy supplies" and called on the world community to do everything to bring Tehran to justice. The official   representative of the Ministry of Foreign Affairs of the Islamic Republic, Abbas Mousavi, rejected accusations of the country's involvement in the attack on Saudi Arabian oil facilities.

The Wall Street Journal, citing  Saudi officials, reported that the country intends to restore oil production by a third by Monday, lost due to a drone attack.

A more serious problem for markets is how  investors' accounting for the risk of further attacks will affect trading, said Kerry Craig, international markets strategist at J.P. Morgan Asset Management^[1]

Experts from the international group Coface, specializing in trade insurance and risk management, assessed the possible consequences of the attack on the global market. Despite the fact that later prices stabilized somewhat, the attack on Saudi Aramco facilities puts upward pressure on the price of oil, and therefore can have significant consequences not only for the Saudi market, but also for the global economy as a whole.

The oil market is reacting sharply to geopolitical events, especially in the Middle East, and recently Yemeni rebels, with whom Saudi Arabia has been fighting for more than four years, have been increasingly disruptive, so the risks associated with armed conflicts continue to be a significant factor in the hydrocarbon market. At the same time, attacks on key facilities in the oil industry coincided with another aggravation of relations between the United States and Iran. Washington accuses Tehran of supporting Houthi rebels, so geopolitical tensions in the region could worsen greatly in the near future.

There is a possibility that the Saudi economy will suffer significantly. The hydrocarbon sector accounts for almost 40% of the country's GDP and 70% of its budget revenues. Given that now the economy is already underperforming oil profits due to restrictions agreed under OPEC +, the growth rate of the Saudi market may slow down significantly.

Notes