Saudi Aramco, the world’s largest oil company, has announced a substantial $31.05 billion payout to shareholders and the Saudi government following a robust second-quarter performance that exceeded market expectations. The announcement highlights Aramco’s ongoing financial strength despite a slight decline in quarterly profits.
For the second quarter of 2024, Saudi Aramco reported a net profit of $29.07 billion. While this figure is down from the $30.83 billion achieved during the same period last year, it surpassed the $27.7 billion forecasted by analysts. This strong performance is attributed to resilient crude-oil prices, which helped counterbalance the impact of reduced crude oil sales volumes and weaker refining margins compared to the previous year.
Chief Executive Amin H. Nasser attributed the company’s successful quarter to its ability to adapt to varying market conditions. He stated, “Our strong results reflect our resilience and ability to adapt through market cycles.”
The improvement in crude-oil prices from the first quarter was driven by easing inflationary pressures, robust seasonal growth, and declining oil inventories. Aramco’s quarterly hydrocarbon output was reported at 12.3 million oil-equivalent barrels, an 8.9% decrease from last year, while cash flow from operations fell to $31.09 billion from $33.62 billion.
Saudi Aramco declared a base dividend of $20.28 billion and a performance-linked dividend of $10.77 billion for the second quarter. The substantial $31.05 billion payout underscores Aramco’s role as a critical financial pillar for Saudi Arabia, which relies on these dividends to fund its ambitious projects and economic diversification efforts under the Vision 2030 plan.
The Saudi government’s investments include a high-tech desert city and a global airline, alongside efforts to shift the economy away from its dependence on oil. Additionally, the government recently raised $12.35 billion through an Aramco stock sale to support these initiatives and further investments in new energy sectors.
Aramco also continues to expand its global portfolio in liquefied natural gas (LNG). The company has secured agreements with key LNG producers, including Texas-based NextDecade and California’s Sempra, reflecting strong demand-driven growth for LNG as a crucial component in the global energy transition.
The company has reaffirmed its commitment to distribute a total of $124 billion in dividends for the year, aligning with its strategy to deliver significant returns to shareholders while supporting Saudi Arabia’s broader economic goals.
In comparison, other global oil majors also reported strong second-quarter profits, with Exxon Mobil, Shell, and BP all exceeding market expectations. Conversely, Chevron underperformed due to weaker downstream earnings impacted by lower refining margins.
Saudi Aramco’s continued financial strength and substantial dividend payouts reflect its dominant position in the global energy market and its crucial role in supporting Saudi Arabia’s economic transformation.
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