© Reuters. A view shows branded oil tanks at Saudi Aramco’s oil facilities in Abqaiq, Saudi Arabia, on October 12, 2019. REUTERS / Maxim Shemetov
By Hadeel Al Sayegh, Marwa Rashad and Saeed Azhar
DUBAI (Reuters) – Saudi Arabian state oil producer Aramco (SE 🙂 reported a nearly fourfold rise in second-quarter net profit on Sunday, exceeding expectations and driven by rising oil prices and recovering demand of oils.
Aramco said its results were supported by the global easing of COVID-19 restrictions, vaccination campaigns, stimulus measures and the acceleration of economic activity in key markets.
Aramco joins other large oil companies that have reported strong results in recent weeks.
Exxon Mobil (NYSE 🙂 last month said second-quarter net income reached $ 4.688 billion, or $ 1.10 per share, compared to a loss of $ 1.08 million, or 26 cents per share, ago one year. Royal Dutch Shell (LON 🙂 reported its highest quarterly earnings in more than two years, with adjusted earnings of $ 5.53 billion, compared to earnings of $ 638 million the previous year.
Oil prices, driven by production cuts by the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC +, closed at $ 70.70 a barrel on Friday and have gained more than 35% since the beginning of the year. [O/R]
“Our second quarter results reflect a sharp rise in global energy demand and we are heading towards the second half of 2021 more resilient and more flexible as the global recovery
gains momentum, ”Arinco CEO Amin Nasser said in a statement.
Aramco’s net profit rose to Rs 95,477 crore ($ 25.46 crore) during the quarter to June 30, from Rs 24.62 crore the previous year.
Analysts had expected a net profit of $ 23.2 billion, according to the average estimate of five analysts.
Aramco CEO said in a earnings call that global oil demand was expected to reach 99 million barrels per day by the end of the year and 100 million barrels next year,
Aramco continues to work to increase its own capacity to 13 million barrels a day, Nasser said, reiterating a plan announced last year.
He declared a $ 18.8 billion dividend in the second quarter, in line with his own goal, to be paid in the third quarter.
Swiss credit (SIS 🙂 analysts said late last month they expected Aramco to declare a special dividend because of higher oil prices that had helped increase its free cash flow.
Yousef Husseini, EFG Hermes equity research analyst, said Aramco could keep the extra money to participate in the new state-backed Shareek (Partner) initiative to partner with private sector investments .
“I think the reason they kept [the dividend] and our reason was that they withheld money to invest in future projects and, in particular, in the “Shareek” program, ”he said.
Aramco’s capital expenditures were $ 7.5 billion in the second quarter, a 20% increase over the previous year.
A consortium that included Washington DC-based EIG Global Energy Partners closed a deal in June to buy 49% of Aramco’s pipeline business for $ 12.4 billion.
(1 $ = 3,7501 rials)
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