Dhahran — Saudi Aramco announced its financial results for the second quarter of 2022. Aramco posted a 90% yearly (YoY) increase in net income and declared a dividend of $18.8 billion. Aramco will pay out the dividend in the third quarter.
These results set a new quarterly earnings record for the Aramco Company since its Initial Public Offering in 2019. Higher crude oil prices drove the earnings, as did the volumes sold and refining margins.
Aramco reached a record quarterly income of $48.4 billion. And half-year net income of $87.9 billion in the first half of 2022. This figure is in comparison to $25.5 billion and $47.2 billion, respectively, for the same periods in 2021.
In the second quarter, free cash flow increased by 53% to $34.6 billion. It was $65.2 billion during the first half of 2022, in contrast to $22.6 billion and $40.9 billion YOY.
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ROACE, the return on average capital employed for the second quarter was 31.3%, compared to 16.7% YOY. It reflects the higher crude oil prices, volumes sold, and improved downstream margins.
Aramco declared an $18.8 billion dividend for the second quarterly income, payable in Q3 2022. Aramco’s 2021 Annual Report states the Company distributed bonus shares to shareholders in Q2 2022 at one share for every ten shares.
The energy giant aims to maintain a sustainable and progressive dividend based on prospects and financial results achieved.
Capital expenditure at Aramco increased by 25% to $9.4 billion in the second quarter and by 8% to $16.9 billion for the first half of 2022.
Aramco will invest in growth opportunities to develop strategic integration of its upstream and downstream segments.
The energy conglomerate plans to expand its chemicals business and develop prospects in low-carbon industries.
Amin H. Nasser, President & CEO of Aramco, said: “Our record second-quarter results reflect increasing demand for our products. Particularly as a low-cost producer in the industry.”
He added: “While global market volatility and economic uncertainty remain, events support our view that ongoing investment in our industry is essential to ensure markets remain well supplied and facilitated in an orderly energy transition.
He expected oil demand to continue to grow for the rest of the decade, despite downward economic pressures on short-term global forecasts.
But while there is a genuine and present need to safeguard the security of energy supplies, climate goals remain critical.
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For this purpose, Aramco is working to increase production from multiple energy sources — including oil and gas, blue hydrogen, and renewables.
“We are advancing the biggest capital program in our history. Our strategy is to invest in the reliable energy and petrochemicals that the world requires,” Nasser said.
The Company’s gas development program is progressing towards expanding production with the ongoing initial development and design of the Jafurah Gas Plant.
The establishment has a planned raw gas processing capacity of 3.1 billion standard cubic feet per day (bscfd). The project completion is scheduled in two phases ending in 2027.
The Jafurah field will commence production in 2025. It will gradually increase natural gas deliveries to reach 2.0 bscfd by 2030.
The production will provide feedstock for hydrogen and ammonia production and help meet the growing local energy demand.
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The Aramco SABIC integration is progressing well as the Company continues to capture synergies in multiple areas. These include procurement, stream integration, feedstock optimization, and maintenance activities.