Saudi Arabian Oil Co. (Aramco) has reported $27.3 billion in net profit for the first quarter, down 14.4 percent compared to the same three-month period a year ago as lower oil sales volumes offset higher prices.
The state-owned oil giant collected $116.8 billion in revenue and other income related to sales for the January–March 2024 quarter, down 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 opening quarter of 2024, down from 12.8 MMboepd in the first quarter of 2023.
On January 30 Aramco announced it was reducing its maximum crude output for an extended period to 12 MMbpd, down one MMbpd from what it was working on, on the order of the government.
Before this output rollback, Saudi Arabia, along with other members of the Organization of Petroleum Exporting Countries Plus (OPEC+) alliance, has already put in place production cuts that have been extended several times since 2022. Active voluntary reductions across OPEC+ totaling 2.2 MMbpd—1,000 bpd for the Saudis—remain till June, “aimed at supporting the stability and balance of oil markets”, according to an OPEC statement March 3, 2024.
On the other hand, Aramco logged an increase in average realized petroleum price to $83 a barrel in the first quarter of 2024 from $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 increased crude oil prices as a result of lower global oil inventories and higher forecasted demand”, it said in the quarterly report, accessible on its website.
However, Aramco’s bottom line dropped primarily due to “lower crude oil volumes sold, weakening refining and chemicals margins, and lower finance and other income”, the report stated. The decrease was “partially offset by lower production royalties and an increase in crude oil prices compared to the same period last year”.
Nonetheless, base dividends paid in the first quarter rose four percent sequentially to $20.3 billion. “In addition, the Company paid the third performance-linked dividend distribution of SAR 40.4 billion ($10.8 billion), representing a 9.0 percent increase from 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 full-year dividends, comprising $81.2 billion in base dividends and $43.1 billion in performance dividends.
Aramco exited the quarter with $182.3 billion in current assets—assets convertible to 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 as of end-March.
“Our first quarter performance reflects the resilience and strength of Aramco, reinforcing our position as a leading supplier of energy to economies, to industries and to people worldwide”, president and chief executive Amin H. Nasser said in a statement.
“We also continue to execute our long-term strategy, and in the first quarter made significant progress on expanding our gas business and growing our globally-integrated downstream value chain, while maintaining our focus on consistently delivering value for our shareholders”.
In its annual report for 2023 Aramco bared a target to raise natural gas production to over 60 percent by 2030 relative to 2021 levels.
Downstream, in the first quarter of 2024, Aramco completed the purchase of Chile fuels 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, but at the same time recognizes the need for affordable, reliable, and flexible energy supplies”, Nasser added.
To contact the author, email jov.onsat@rigzone.com
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