Due to continued low output, Saudi oil major Aramco on Tuesday announced net income of $29.07 billion for the second quarter, a minor decrease from the same period last year.
The company claimed in a statement uploaded to the Saudi stock exchange that the drop of 3.4 percent “mainly reflects the impact of lower crude oil volumes sold and weakening refining margins”.
The largest crude exporter in the world, Saudi Arabia, is now producing about nine million barrels per day (bpd), far less than its capacity of twelve million bpd.
The Riyadh-based company Jadwa Investment stated last week that production in June averaged 8.8 million barrels per day.
The relatively low figure reflects cuts dating back to October 2022, when the OPEC+ bloc of oil producers that Riyadh co-leads with Moscow announced it would reduce output by two million bpd to boost prices.
In April 2023, several OPEC+ members announced they would further slash production by more than one million bpd, and in June 2023, Riyadh announced an additional voluntary cut of one million bpd.
“Output will remain at similar levels until at least October”, at which point an OPEC+ agreement announced in June 2024 will allow “for gradual monthly increases”, Jadwa said.
The crown jewel of the Saudi economy, Aramco provides the majority of funding for Crown Prince Mohammed bin Salman’s Vision 2030 reform program, which intends to position the Gulf state for prosperity in the post-oil era.
The company’s earnings enable Saudi Arabia to fund showpiece projects like the futuristic megacity NEOM, which is being constructed in the desert, a massive airport in Riyadh, and significant leisure and tourism projects.
Approximately 81.5 percent of Aramco, one of the largest corporations in the world based on market capitalization, is owned by the government.
The largest IPO in history, Aramco’s 2019 IPO raised $29.4 billion, while this year’s secondary selling of about 1.7 billion shares brought in $12.35 billion.
Aramco announced last year it would start paying a performance-based dividend in addition to its base dividend.
In May, the firm announced base dividend payouts for the first quarter totalling $20.3 billion and a performance-linked dividend distribution of $10.8 billion to be paid in the second quarter.
Those payments will extended for another quarter and Aramco “expects to declare industry-leading dividends of $124.2 billion in 2024”, Tuesday’s statement said.
“We have delivered market-leading performance once again, with strong earnings and cash flows in the first half of the year,” Aramco chief executive Amin Nasser said.
“Leveraging those strong earnings, we continued to deliver a base dividend that is sustainable and progressive.”
