Oil giant Saudi Aramco: the company makes $700 million in profits every day


Oil giant Saudi Aramco made an astonishing $700 million profit every day, the biggest quarterly profit of any publicly traded company in history.

The Saudi oil and gas company reported a whopping $68 billion ($48.4 billion) profit in the second quarter of 2022.

Its revenue was boosted by growing demand as Covid-19 restrictions were dropped around the world – and pushed even higher by Russia’s invasion of Ukraine.

Net profit jumped 90% year-on-year for the world’s biggest oil producer, which posted its second straight quarterly record after announcing $55.46 billion ($39.5 billion) for the first quarter .

Aramco’s massive second-quarter windfall was the biggest quarterly adjusted profit of any listed company globally, according to Bloomberg.

The Saudi state-owned company tops a list of oil majors raking in massive sums after ExxonMobil, Chevron, Shell, TotalEnergies and Eni also reported multi-billion dollar profits in the second quarter.

US President Joe Biden blasted ExxonMobil earlier this year as inflation rose, saying it was making “more money than God”.

And the future looks bright for Saudi Aramco.

“While global market volatility and economic uncertainty remain, events in the first half of this year confirm our view that continued investment in our industry is essential,” said the President and CEO of ‘Aramco, Amin Nasser.

“In fact, we expect oil demand to continue growing for the rest of the decade,” he added.

Net income rose 22.7% from the first quarter in “solid market conditions,” Aramco said.

Half-year earnings were $123.41 billion ($87.9 billion), compared to $66.27 billion ($47.2 billion) for the same period of 2021.

Aramco will pay a dividend of $26.39 billion ($18.8 billion) in the third quarter, the same as in the second quarter.

It “continues to work on increasing maximum sustainable crude oil capacity from 12 million barrels per day to 13 million by 2027,” its earnings announcement said.

Quarterly profits, the highest since Aramco’s record IPO in 2019, beat an analyst’s forecast compiled by the company by $64.86 billion ($46.2 billion).

Shares of Aramco closed down 0.9% at 40.5 riyals ($15.16) on the Saudi stock exchange. They are up 25% this year.

‘Crown Jewel’

Aramco floated 1.7% of its shares on the Saudi stock exchange in December 2019, raising $41.28 billion ($29.4 billion) in the world’s largest initial public offering.

The ‘crown jewel’ and biggest earner of the conservative kingdom temporarily supplanted Apple as the world’s most valuable company in March. It now sits at number two on the list with a market valuation of $3.37 trillion (US$2.4 trillion).

Saudi Arabia has sought to open up and diversify its oil-dependent economy, particularly since the appointment of Mohammed bin Salman as crown prince and de facto ruler in 2017.

Despite the increase in production, Aramco has pledged to achieve “net zero (carbon) operational emissions” by 2050. Carbon pollution is accounted for in the country that uses the fuel, not where it is produced.

Saudi GDP jumped nearly 12% in the second quarter due to high oil prices, the government announced last month.

Abu Dhabi-based energy expert Ibrahim Elghitany said the oil bonanza was a “golden opportunity” for the country.

“Saudi Arabia has recently achieved financial surpluses that it has not achieved in the past decade, which helps secure funding for its development projects,” Elghitany told AFP.

Nasser said Aramco had recovered quickly from a series of attacks by Yemen’s Houthi rebels on its facilities earlier this year, including a dramatic strike in Jeddah that sent smoke through a session. Formula 1 training in March.

“We were able to immediately restore production at all of these facilities. Within weeks, all facilities were operating and producing at full capacity,” he said in a conference call with media.

Oil prices fell $42 a barrel from a high in June due to increased supply, but remain near $140 (US$100).

OPEC’s group of oil-producing nations has been steadily increasing output, despite pressure from Western leaders including US President Joe Biden – who visited Saudi Arabia last month – to pump in more.

Biden’s trip was seen as a descent after he previously vowed to make Saudi Arabia an “outcast” following the killing of Washington Post columnist Jamal Khashoggi by Saudi agents in Turkey in 2018.

British Prime Minister Boris Johnson has also visited Saudi Arabia since the Russian invasion in February.

High oil prices are contributing to the inflationary pain suffered by consumers around the world.

– with Andrew Backhouse, AFP


Comments are closed.