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Saudi Aramco Q2 profit surges almost 4 times

August 10/2021

MOSCOW (MRC) -- Saudi Aramco, the world's largest oil company, said Aug. 8 that its hydrocarbons production fell 8% to 11.7 million boe/d in the second quarter from the year-earlier period due to OPEC+ cuts, but its profit surged almost four times thanks to higher oil prices and a recovery in worldwide demand, reported S&P Global.

Net income soared to USD25.5 billion in the second quarter from USD6.6 billion a year earlier, the company said in an earnings statement.

Aramco's total hydrocarbon production, which averaged 12.7 million boe/d in the second quarter of 2020, fell mainly due to OPEC+ cuts this year, CEO Amin Nasser said in a media call with journalists.

"Our second quarter results reflect a strong rebound in worldwide energy demand and we are heading into the second half of 2021 more resilient and more flexible, as the global recovery gains momentum," Nasser said in the statement. "While there is still some uncertainty around the challenges posed by COVID-19 variants, we have shown that we can adapt swiftly and effectively to changing market conditions."

The Q1 dividend of USD18.8 billion was paid in the second quarter, and the Q2 dividend of USD18.8 billion will be paid in the third quarter, the company said.

Aramco is working on boosting its maximum sustainable capacity to 13 million b/d from 12 million b/d and expects most of the increase to come from offshore fields, Nasser said on the call. Fields that will contribute to production increments are Zuluf, Marjan and Berri.

Saudi Aramco expects global oil demand to rise by the end of 2021 and in 2022 on economic recovery and higher oil demand, particularly in the US and China, the CEO added.

"Our expectation that recovery will continue, yes variants are having a certain impact; however we are seeing more openings of economies and we expect by year end the demand will be around 99 million b/d," he said. "There is strong economic recovery that we see and demand rebound especially from the US and China and we expect it to be at a 100 million b/d next year as a forecast for total demand."

OPEC in July put 2021 global oil demand at 96.58 million b/d and 2022 at 99.86 million b/d.

Capital expenditure was USD7.5 billion in the second quarter, up 20% from a year earlier and the company expects 2021 total to be approximately USD35 billion.

Aramco is still doing its due diligence to buy a 20% stake in the oil-to-chemicals unit of Reliance Industries (RIL), the CEO said. The deal could not progress in 2020 after the oil price crash and demand destruction caused by the pandemic, which saw Aramco tighten its belt.

"India is a very important market for us. We continue to review opportunities in India," he said. "We are still doing our due diligence (on the Reliance deal). We were delayed a little bit because of COVID 19 but we are back on track doing our due diligence."

As MRC informed earlier, Mukesh Ambani, chairman and managing director of RIL, said in June, 2021, he expects the company's deal with Saudi Aramco to materialise this year.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, propylene, ethylene, petrochemistry, Reliance Industries, Saudi Aramco, India, Saudi Arabia.
Category:General News
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