160% rise in 3rd quarter profit by Saudi Aramco, chairman declares ‘stable’ energy transition

160% rise in 3rd quarter profit by Saudi Aramco, chairman declares ‘stable’ energy transition
  • Saudi Aramco reported a 160 percent increase in third-quarter net income to $30.4 billion, with a 131 percent increase in free cash flow as the oil giant reaps the benefits of market recovery.
  • As world leaders meet for the COP26 climate summit, the world’s largest energy corporation says it is “optimistic that energy consumption will stay healthy for the foreseeable future.”
  • “Recent energy disruptions around the world demonstrate the importance of a stable and inclusive energy transition,” says Yasir Al-Rumayyan, Chairman of Aramco.

Aramco records a significant increase in third-quarter

THE UNITED ARAB EMIRATES — DUBAI, United Arab Emirates — The third-quarter net income of Saudi Arabia’s oil behemoth Aramco increased by 158 percent to $30.4 billion. The reopening of the global economy, increasing oil and gas prices, and increased economic activity in key markets continue to benefit the world’s top oil firms.

Analysts estimated a median net income of USD 29.1 billion for the quarter, however, the result exceeded expectations. In the third quarter of 2020, Aramco announced a net profit of $11.8 billion. The increase in net income was attributed to increased crude oil prices and volumes sold, as well as greater refining and chemicals margins in the quarter, according to Aramco.

The Jackpot for the Industry

As the market moves its focus from demand recovery to supply scarcity, WTI crude oil has risen above $85 in recent weeks, a level not seen since 2014. Natural gas prices have risen by roughly 130 percent this year, implying that the full impact of the global energy crisis will be felt more in the fourth quarter.

Aramco announced a large dividend of $18.8 billion, which would be paid in the fourth quarter. A boost in free cash flow to $28.7 billion in the third quarter, up from $12.4 billion in the same quarter in 2020, can support the payout. Aramco also stated that it would “invest for the future” in the third quarter, with a capital expenditure of $7.6 billion. When compared to the same period in 2020, this represents a 19% rise. According to Aramco, capital expenditures in 2021 are estimated to be over $35 billion.

Initiatives by Companies

Aramco and Adnoc, the UAE’s largest oil company, have launched climate initiatives just days before the COP26 climate summit. Simultaneously, plans are being made to invest to boost oil output in the next years.
By 2050, Aramco wants to achieve net-zero emissions from its wholly-owned enterprises, while also increasing oil production to 13 million barrels per day by 2037. Saudi Arabia’s separate vow to invest over $190 billion to achieve net-zero emissions by 2060 drew acclaim and skepticism from watchers in the oil business.

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