Saudi Arabian Oil Co. (Aramco) reported first-quarter net profit of $27.3 billion, down 14.4 percent from the same three-month period last year, the decline oil sales volumes having offset the price increase.
The state-owned oil giant collected $116.8 billion in revenue and other sales-related income for the January-March 2024 quarter, up from $122.6 billion year-on-year, according to its quarterly financial report.
Production averaged 12.4 million barrels of oil equivalent per day (MMboepd) in the first quarter of 2024, compared to 12.8 MMboepd in the first quarter of 2023.
On January 30, Aramco announced that it was reducing its peak crude production for an extended period to 12 mb/d, down 1 mb/d from what it had been working on, on government orders.
Prior to this production cut, Saudi Arabia, along with other members of the Organization of the Petroleum Exporting Countries Plus (OPEC+) alliance, had already implemented production cuts that were extended to several resumed since 2022. Active voluntary reductions within OPEC+ totaling 2.2 million barrels per day – 1,000 b/d for the Saudis – remain until June, “with the aim of supporting stability and balance of oil markets”, according to an OPEC press release dated March 3, 2024.
On the other hand, Aramco recorded an increase in the average realized oil price to $83 per barrel in the first quarter of 2024, compared to $81 in the corresponding quarter a year ago.
“Global market conditions in the first quarter of 2024 improved compared to the previous quarter, driven by higher crude oil prices resulting from lower global oil inventories and higher expected demand,” the report said. quarterly, accessible on its website.
However, Aramco’s results fell mainly due to “decreased volumes of crude oil sold, weakening margins in refining and chemicals, and lower financial and other revenues,” the report said. report. The decline was “partially offset by lower production royalties and higher crude oil prices compared to the same period last year.”
Nonetheless, basic dividends paid in the first quarter increased four percent sequentially to $20.3 billion. “In addition, the company paid the third performance-related dividend distribution of SAR 40.4 billion ($10.8 billion), representing an increase of 9.0 percent compared to the previous quarter,” Aramco said. It started paying performance-based dividends in the third quarter of 2023. These performance dividends are to be paid over six quarters.
Aramco plans to declare $124.3 billion in dividends for the full year, including $81.2 billion in base dividends and $43.1 billion in performance dividends.
Aramco ended the quarter with $182.3 billion in current assets – assets convertible into cash within a year – including $65.1 billion in cash and cash equivalents. Its current liabilities totaled $82.4 billion, including $13.7 billion in borrowings. Aramco held $22.8 billion in free cash flow at the end of March.
“Our first quarter performance reflects Aramco’s resilience and strength, reinforcing our position as a leading provider of energy to economies, industries and citizens around the world,” said Chairman and Chief Executive Officer Amin H. Nasser in a press release.
“We also continue to execute on our long-term strategy and in the first quarter we made significant progress in expanding our gas business and growing our globally integrated downstream value chain, while maintaining our goal of consistently delivering value to our shareholders.”
In its annual report for 2023, Aramco set a goal of increasing natural gas production to more than 60% by 2030 from 2021 levels.
Downstream, in the first quarter of 2024, Aramco completed the purchase of Chilean fuel retailer Esmax Distribucion SPA from Southern Cross Group, marking Aramco’s entry into the South American fuel retail market.
“Looking ahead, I expect our portfolio to continue to evolve as we aim to contribute to an energy transition that offers solutions to climate challenges, while recognizing the need for affordable, reliable energy supplies and flexible,” Nasser added.
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