• 3 minutes Cyberattack Forces Shutdown Of Largest Gasoline Pipeline In United States - Zero Hedge
  • 6 minutes Renewable Energy Capacity Jumped 45% Worldwide In 2020; IEA Sees 'New Normal'
  • 11 minutes Forecasts for Natural Gas
  • 4 hours U.S. Presidential Elections Status - Electoral Votes
  • 6 hours Electric vehicle market growth is a blessing for some metals — and not a big worry for oil
  • 1 hour .
  • 7 hours Is the Republican Party going to perpetuate lies about the 2020 election and attempt to whitewash what happened on January 6th?
  • 1 day CRAPPIFORNIA DOES IT AGAIN! California proposes to steer new homes from gas appliances
  • 2 days Сryptocurrency predictions
  • 1 day Joe Biden's Presidency
Extending The European Green Deal Into Eurasia

Extending The European Green Deal Into Eurasia

Europe’s Green Deal has already…

Russia Has Oil Reserves At Least Until 2080

Russia Has Oil Reserves At Least Until 2080

Russia’s oil reserves will last…

Aramco's Q3 Profit Slumps 45%

Aramco reported a net profit of $11.8 billion for the third quarter of 2020, down by 44.6 percent on the year as low oil prices continued to bite into its financial performance.

The company also said it had free cash flow of $12.4 billion at the end of the three-month period and declared a dividend of $18.75 billion for the quarter.

For the first nine months of the year, the hit from low oil prices and depressed demand was stronger. Net profit was down by close to 49 percent to $35.015 billion.

In oil production, the Saudi major reported an average daily of 9.2 million bpd for the first nine months of the year as it continued capping output in compliance with the OPEC+ agreement.

Earlier this year, Aramco declared an annual dividend of $75 billion. That amount, however, will not be sufficient to cover the Saudi budget deficit, Moody’s said in a report last month. Now, with oil prices still low and likely to go lower still if the surge in Covid-19 cases continues in Europe and the United States, Aramco’s earnings will take a bigger hit.

This means that the government in Riyadh will not be able to plug the budget hole with the Aramco dividend as it has done previously.

“The government is unlikely to be able to repeat the maneuver beyond 2021,” Moody’s said in the report. Aramco will have its own capital expenditure needs and its commitment to buy petrochemicals giant SABIC to look after, according to the ratings agency.

Despite the challenging environment, Aramco expects that oil supply will tighten over the next year as demand recovers to pre-pandemic levels. China is seen as the source of most of the rebound, supported by other Asian countries.

For the immediate future, however, Aramco is much less bullish. The company said last week that oil demand was currently too weak for OPEC+ to go ahead with its plan to relax production cuts by another 2 million bpd from next January.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • Mamdouh Salameh on November 03 2020 said:
    Saudi Aramco’s profit and free cash flow figures aren’t normal. Moreover, Saudi Aramco like the global economy and other international oil companies is operating in abnormal conditions as manifested by the resurgent COVID-19 pandemic.

    Saudi Aramco isn’t like other oil majors. If it was, it wouldn’t declare a dividend of $18.75 bn for the third quarter when it only had a free cash flow of $12.4 bn. But then the Saudi government which owns Aramco is the major shareholder to the tune of 98% and it depends on the dividends to plug its budget deficit.

    Saudi budget deficit in 2020 could be expected to exceed $116 bn.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • George Doolittle on November 03 2020 said:
    One of the biggest blunders in all of History: "taking Saudi Aramco public."

    Now everyone knows the entire Kingdom is bankrupt and by exactly how and exactly how much.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News