Saudi Aramco, the world’s largest oil exporter, reported more than a 23% year-on-year decline in its net income for the third financial quarter to $32.6 billion due to relatively lower crude prices and production cuts. Aramco had reported a net income of $42.4 billion for the same three months last year.
Even so, the company beat the median estimate of 12 analysts that expected Aramco to post revenues of $31.8 billion for the latest quarter. The Saudi giant said that its “decrease in EBIT (earnings before interest and taxes ) resulted from both lower average realized crude oil prices and lower volumes sold, partially offset by a decrease in production royalties”.
Capacity expansion
The Saudi giant is expanding its oil production capacity to 13 million barrels per day, up from the existing 12 million bpd capacity and is spending heavily on upstream projects. Aramco chief executive Amin Nasser said the company would continue to identify new opportunities to evolve its business. In the third quarter, Aramco noted that it “delivered total hydrocarbon production of 12.8 million barrels of oil equivalent through continued reliable and efficient operations”.
Saudi Arabia has recently said that it would maintain its 1 million bpd voluntary oil production cut until at least the end of December. Aramco noted the company’s “strategic expansion continues with agreement on the first international LNG (liquefied natural gas) investment, and a plan to enter the South American market through a downstream retail acquisition”.
In line with forecasts
A report by RBC Capital Markets said on Tuesday that “Aramco delivered another decent set of results”, with earnings in line with market expectations. “Lower crude volumes were offset by a growing gas production profile as well as strong crude realizations relative to key benchmarks,” it noted.
Aramco added it has increased its raw gas processing capacity by 800 million cubic feet per day in the most recent quarter, including approximately 750 MMCfd of sales gas processing capacity, through the Hawiyah Gas Plant expansion.
“The Hawiyah gas plant expansion coming onstream during the quarter adding 750 MMcfd of sales gas capacity is one of many growth projects slated to come online in the coming years across oil and gas for the company, which should support continued cash generation and shareholder returns going forward,” the RBC Capital Markets report noted.
Source: https://www.upstreamonline.com