Aramco Q1 profits down, capex up

Aramco has reported healthy profits of US27.3bn in the first quarter of 2024, down slightly from the US$31.9bn figure in Q1 2023

Aramco said that the drop in net income was due to reduced crude oil sales and weakening refining and chemicals margins, although the oil price was higher in the period compared with the previous year. Constrained production due to OPEC production cuts is likely to have been a factor.Capital expenditure in the first quarter was US$10.8bn, up from US$8.7bn in 2023. The growth in capital spending is directed mainly towards upstream liquids and gas, downstream liquids to chemicals, and new energies such as renewables, lower-carbon fuels, and blue ammonia and hydrogen, the company said in its quarterly report.Aramco achieved total hydrocarbon production of 12.4mn boed in the first quarter. In January 2024, the Government directed Aramco to maintain MSC at 12mn bpd, down from the earlier 13mn bpd target.“This directive will have no impact on announced, nearterm projects including the Dammam development and the Marjan, Berri, and Zuluf crude oil increments,” Aramco said. “Production from these projects will be used to maintain MSC at 12mn bpd, which provides operational flexibility to increase production and supports Aramco’s unique ability to rapidly respond to changing market conditions.”

Increased focus on gas

With the aim of increasing gas production by more than 60% over 2021 production levels by 2030, subject to domestic demand, Aramco progressed initiatives including design, procurement, and construction activities at the Jafurah Gas Plant, part of the Jafurah unconventional gas field development that is expected to commence production in 2025 and gradually increase natural gas deliveries to reach a sustainable rate of 2.0 bscfd by 2030; and awarded US$7.7bn of EPC contracts for the Fadhili Gas Plant expansion, which is expected to add 1.5 bscfd of processing capacity. It also announced the addition of 15 tscf to proven gas reserves and two billion stock tank barrels of condensate at the Jafurah unconventional field.

Aramco acquired a stake in LNG company MidOcean, to progress its ambition of developing an integrated global LNG business.

Key developments downstream included start of construction at the SABIC Fujian Petrochemical Complex in China’s Fujian province, and acquisition of a 100% equity stake in Esmax, a leading diversified downstream fuels and lubricants retailer in Chile.

Aramco also announced that venture capital funding would be more than doubled to US$7.5bn. Half of the new funding will be directed toward disruptive technologies outside the energy sector, with the remaining portion to go to late-stage, larger-ticket ventures in the sustainability and digital domains.

Aramco announced a Q1 2024 base dividend of US$20.3bn and the fourth performance-linked dividend distribution of US$10.8bn to be paid in the second quarter. It expects total dividends of US$124.3bn to be declared in 2024.

Aramco president and CEO Amin H. Nasser commented, “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.

“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.

“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 recognises the need for affordable, reliable, and flexible energy supplies.”

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