By
Bhushan Akolkar
August 7th, 2023
The company expects the post-pandemic recovery in oil demand to last for the rest of the decade.
The ongoing high oil prices have pushed Saudi Aramco to post a 90% spike in Q2 2022 net income. According to the Dhahran-based public petroleum and natural gas company, the market condition sent its net income from $25.5 billion in Q2 2021 to $48.4 billion in Q2 2022. The result also exceeded analysts’ expectations of $46.2 billion. In addition, Saudi Aramco also reported record half-year results on Sunday.
Speaking on its Q2 2022 and half-year achievements, Saudi Aramco President Amin Naseer said the results reflected increasing market demand. Naseer said consumers are increasingly demanding of the company’s products. He added that Saudi Aramco is a low-cost producer and is one of the “lowest upstream carbon intensities in the industry.” These outstanding features contributed to the second quarter earnings.
The executive added:
“While global market volatility and economic uncertainty remain, events during the first half of this year support our view that ongoing investment in our industry is essential – both to help ensure markets remain well supplied and to facilitate an orderly energy transition.”
Saudi Aramco Announces Outstanding Q2 2022 Results and Record Half-Year Net Income
Saudi Aramco announced that its first six months’ net income popped to $87.9 billion. The six months income lifted Aramco over oil giants including ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX), and BP (NYSE: BP). Last week, Chevron and Exxon reported record quarterly profits as commodity prices boom. While Chevron said earnings grew to $11.62 billion during the second quarter, Exxon announced earnings of $17.9 billion. Meanwhile, the former reported revenues of $3.08 billion the previous year, and the latter announced $4.7 billion in earnings. Oil prices swelled more than $130 per barrel earlier in the year. The high prices began with the global energy crisis, and the Russia-Ukraine war escalated the issue. Russia’s invasion of Ukraine caused supply disruption, which affected many companies across different sectors. All these are the reasons for the decades-high inflation.
The company expects the post-pandemic recovery in oil demand to last for the rest of the decade. Aramco added that it would still pay its dividend worth $18.8 billion in Q4 as there is a 53% increase in free cash flow to $43.6 billion. Furthermore, the oil giant is investing with its major gains and also paying debts. The company is investing in its production capabilities in renewables and hydrocarbons.
“We are progressing the largest capital program in our history, and our approach is to invest in the reliable energy and petrochemicals that the world needs, while developing lower-carbon solutions that can contribute to the border energy transition.”
Notably, Saudi Aramco said its total hydrocarbon production during Q2 2022 is 13.6 million barrels of oil equivalent per day. The company is also working on expanding its capacity from 12 million daily 12 million barrels of oil to 13 million by 2027.