Saudi Aramco profits soared 30% in the first quarter of the year, as COVID-ravaged economies come to life and boost demand for oil.

Saudi Aramco said on Tuesday that its profits climbed 30% in the first quarter of the year, compared to last year, due to higher crude oil prices. The findings come as some of the world’s largest economies come out of recession and ease restrictions on the rollout of COVID-19 vaccines.

The company’s financial results show net income of $ 21.7 billion for the first three months of the year, compared to the same period in 2020 when Aramco’s profits fell to $ 16.7 billion as the first effects of the coronavirus pandemic began to drastically depress global demand. for oil. Brent fell to around $ 20 a barrel from its lowest level last year.

Saudi Arabian Oil Co said the profit increase mainly reflects the impact of rising crude oil prices, which have averaged around $ 60 a barrel in recent months. Prices have risen steadily amid increased global demand for crude and disciplined cuts in production by producers to balance the market.

Aramco produced some 9.2 million barrels per day in 2020, compared to a current average of 8.6 million barrels per day for the first quarter of 2021.

Crown Prince Mohammed bin Salman revealed in an interview last week that there were talks to sell a 1% stake in Aramco to a leading global energy company [File: Jacquelyn Martin/AP Photo]

The company has confirmed that it will deliver a promised dividend of $ 18.75 billion to its shareholders this quarter, or $ 75 billion per year. Almost all of this payment goes to the Saudi government, which owns over 98% of the company, with the remaining 1.7% trading on the Saudi stock market.

The payout, however, exceeds Aramco’s current cash flow by $ 18.3 billion. Aramco saw its annual profits nearly halved in 2020 to $ 49 billion, from $ 88 billion in 2019 and $ 111 billion in 2018.

Yet the Saudi company remains one of the most valuable companies in the world.

Aramco’s higher profits will be a welcome relief for the Saudi government, which continues to rely heavily on the company’s oil barrels for its revenue.

Aramco, which produces all of the kingdom’s oil and gas, is at the heart of Crown Prince Mohammed bin Salman’s (MBS) efforts to diversify the economy. The prince intends to transfer ownership of Aramco to the country’s sovereign wealth fund and use the profits for investments abroad and locally with the aim of stimulating new sectors and creating millions of new jobs for Saudi youth.

Aramco CEO Amin Nasser said the first quarter results were a sign that “better days are ahead”.

“While some headwinds remain, we are well positioned to meet the world’s growing energy needs as economies begin to recover,” he said.

The company noted in its findings report that while vaccination programs around the world to fight COVID-19 encourage development, the pandemic is far from over.

The company recently announced a $ 12.4 billion deal to sell lease rights on its pipelines to a consortium of investors led by EIG Global Energy Partners. The sale aims to raise funds to maintain Aramco’s commitment to dividends to shareholders.

MBS revealed in an interview last week that there were talks to sell a 1% stake in Aramco to a leading global energy company. Although he did not reveal more details, speculation has revolved around potential buyers from China, which is the world’s largest importer of oil.

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