Aramco records exceptional performance in 2019; to rationalize 2020 capital spending: CEO

Saudi Aramco recorded an exceptional performance in 2019 through sheer agility and resilience, despite some planned and unplanned circumstances, Saudi Aramco president and CEO Amin Nasser said in a statement today.

State oil giant Saudi Aramco announced a net profit of SAR 330.7 billion ($88.2 billion) as compared to SAR 416.5 billion ($111.1 billion) a year earlier. The decrease was primarily due to lower crude oil prices and production volumes, coupled with declining refining and chemical margins, and a $1.6 billion impairment associated with Sadara Chemical Co.

“Our scale, low costs, and resilience came together to deliver both growth and impressive returns, while also maintaining our position as one of the world’s most reliable energy companies,” Nasser added.

In 2019, Saudi Aramco remained one of the world’s largest producers of crude oil and condensate with an average total hydrocarbon production of 13.2 million barrels per day of oil equivalent.

Following the attacks on 2 facilities in September last year, the company restored production levels within 11 days, due to its emergency response training and procedures.

In February 2020, Saudi Aramco received regulatory approval for the development of the Jafurah unconventional gas field in the Eastern Province. Developed in phases, the start of production is expected in early 2024.

Nasser explained that such strengths, combined with a strong balance sheet and a disciplined and flexible approach to capital allocation, allows the company to grow sustainably.

“Our sustainably growing free cash flow supports dividends for our shareholders despite continued volatility of markets,” he stated.

Saudi Aramco has declared ordinary dividends of $3.9 billion, covering the period from Dec. 5, 2019 through Dec. 31, 2019. The dividends will be paid on March 31, 2020 to registered shareholders as at March 18, 2020.

As the world deals with the difficult and dual challenge of satisfying demand for more energy alongside responding to the rising desire for cleaner energy, Nasser believed that Saudi Aramco is well-positioned to be among the least carbon intensive in the world.

He also highlighted that the recent coronavirus outbreak and its rapid spread illustrate the importance of agility and adaptability in an ever-changing global landscape.

“This is central to our strategy and we will ensure that we maintain the strength of our operations and our finances,” he said.

Nasser added that the company has already started taking steps to rationalize planned 2020 capital spending.

Saudi Aramco also expects capital spending for 2020 to be between $25 billion and $30 billion in light of current market conditions and recent commodity price volatility.

As the capital expenditure for 2021 and beyond is currently under review, Saudi Aramco’s low upstream costs and low sustaining capital provide significant flexibility and demonstrate differentiation to its peers.

Earlier this month, Saudi Aramco announced that it will provide its customers with 12.3 million barrels per day (mbpd) of crude oil in April, an increase of 300,000 barrels per day from the maximum sustained capacity of 12 mbpd.

#Aramco reports strong 2019 results despite difficult macro environment.

Find out more about our 2019 financial results:https://t.co/6E2aCJmFZ8 pic.twitter.com/N6okTJjgVR

— Aramco (@Aramco) March 15, 2020